Following a December pullback amid an uptick in uncertainty, real estate investment trusts (REITs) appear attractively priced and poised to benefit from a more stable macroeconomic environment. PGIM Real Estate’s Rick Romano, Daniel Cooney and Michael Gallagher explore the current market environment, including region-specific insights on the most compelling REIT opportunities for active investors across the globe.
- United States: We think REIT valuations are at very attractive levels, heightening reversion potential following years of underperformance versus equities. Following three REIT privatisations in 2024, we expect similar transactions to ramp up over the next two years.
- Europe: Trade risks from potential U.S. policy shifts, an unstable coalition in France and German elections weigh on the region’s outlook. Despite these factors, private real estate values seem to be near trough levels, and many companies currently offer attractive cash flow yields.
- Asia Pacific: We believe Asia Pacific REITs underpinned by strong structural factors should continue to outperform in a mildly inflationary environment. DeepSeek and next-generation AI models are lowering costs and barriers to adoption, fueling demand for hyperscale and co-location data centres.
Read on for PGIM Real Estate’s latest global real estate securities outlook highlights.
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