Prime city markets to be shielded from US rate hike: Knight Frank

THE US Federal Reserve's raising of interest rates in 2015 is likely to shake up capital and property markets, but Knight Frank analysts believe that prime city markets will be somewhat shielded from their impact.

This is especially if higher rates are accompanied by a strengthening American economy or greater market optimism, they say.

Ian Loh, director and head of investment and capital markets, on Wednesday told reporters that while higher rates will narrow the spread of prime office yields over bonds and neutralise rising rents, he sees capital values of office spaces staying "relatively stable" at least for the next year or so.