Gearing amplifies the impact of property price movements, meaning that investors' returns outperform the market if prices rise, and underperform it if they fall. See the illustrative example here.
Debt incurs a monthly interest charge which has a priority over dividend payments to investors. Should actual Gross Rent be lower than forecast for a particular month, the Dividend Yield would be relatively lower than if the property was not geared.
It is worth mentioning that Dividend Yield is not always adversely impacted by debt. In some instances, Dividend Yield can be enhanced by debt. Two factors that can lead to this happening are low interest rates for the debt and the corporation tax benefit that comes with paying interest.
The tax benefit of interest payments comes because they are tax deductible: a benefit that flows through to Property Partner investors. For example, for every £1 of interest, £0.20 is offset against corporation tax (note corporation tax rates are subject to change).