** Morgan Stanley notes Australian 10-year bond yields are
now at 1.1%, up from 0.75% in Oct/Nov 2020, and that property
stocks tend to be weak in a rising bond yield environment
    ** Says property stocks Goodman Group  GMG.AX  and Charter
Hall  CHC.AX  should continue to see healthy AUM growth in 2021,
as their business models capitalise on the flow of funds into
Real Estate from third parties
    ** Warns all property stocks will suffer if bond yields
hypothetically hike to 2%-3%; higher beta fund managers such as
CHC could have a tougher time as their earnings are directly
linked to asset values and transaction volume
    ** Expects volatility as office properties are likely to
come under leasing pressure from 2021, and malls are yet to
settle to a new normal
    ** However, says on an overall basis, listed property stocks
are not expensive; their distribution yield premiums over bond
yields are not at record lows
    ** Says GMG and CHC asset returns still seem to be sound,
despite heightened bond yields
    ** Brokerage says Dexus  DXS.AX  yields look attractive, but
leasing and occupancy uncertainty may put underlying earnings
under pressure
    ** MS prefers Arena Reit No 1  ARF.AX  for security of
yield, Scentre Group  SCG.AX  for a clean slate after a torrid
2020
       

 (Reporting by Yamini C S and Arundhati Dutta)
 ((Yamini.CS@thomsonreuters.com;))