As interest rates begin to ease, listed REITs are regaining investor attention, offering a blend of defensive income and long-term growth. PGIM’s Rick Romano, CFA, Daniel Cooney, CFA and Michael Gallagher explore the global real estate securities market’s opportunities on the back of rate cuts, resilient fundamentals, and promising M&A activity.
United States
The September rate cut marked a turning point for U.S. REITs, with investors rotating into hard assets amid equity valuation concerns. Defensive sectors like senior housing and data centers led performance, while cyclical areas such as apartments and self-storage showed early signs of recovery. Office leasing stabilized, with New York outperforming and West Coast markets beginning to rebound.
Europe
European REITs gave back some gains in Q3, but valuations remain attractive across retail, logistics, and healthcare. Political and fiscal risks appear priced in, and public-to-public M&A is creating scale in a fragmented market. Improving transaction volumes and rate cut expectations support a constructive outlook.
Asia Pacific
Asia Pacific REITs led global performance, driven by Japan’s governance reforms and dovish policy, alongside strength in Hong Kong and Singapore. Supply constraints and refinancing tailwinds are supporting rent growth across the region. Active positioning favours Japanese developers, Australian data centres, and Hong Kong retail.
Read on for PGIM Real Estate’s latest global real estate securities outlook highlights.
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