Global Market Review

Global listed real estate delivered strong absolute performance in the second quarter of 2026, with the FTSE EPRA NAREIT Developed Index returning 8.53% for the period. Performance was supported by resilient property fundamentals, improving investor sentiment, and a broader risk-on rotation as economic activity remained durable despite persistent interest rate, inflation, and geopolitical uncertainty. Fundamentals across most major property types remained sound, underpinned by stable occupancy, disciplined new supply, positive rent growth, and generally healthy balance sheets.

Performance dispersion across regions was pronounced. North America led global results with an 11.81% quarterly return, driven by strong U.S. REIT performance, resilient operating trends, and improving confidence in the economic outlook. Europe rebounded with a 6.50% return, supported by improving valuations, M&A activity, and country-level strength in the UK, Spain, and France, although macroeconomic growth concerns, elevated bond yields, and geopolitical risks continued to weigh on sentiment. Asia Pacific was broadly flat at -0.07%, as strength in selected data center, retail, and Singapore REIT names was offset by rate concerns, Japan monetary policy normalization, and renewed caution in Hong Kong and China-linked property markets. 

Property type performance was similarly differentiated. Cyclical sectors such as lodging, office, and malls led in the U.S. as investors rotated toward areas with greater economic sensitivity, while data centers and healthcare remained supported by durable secular demand drivers tied to artificial intelligence, digital infrastructure, and demographics. Logistics, industrial, retail, and selected residential segments continued to benefit from constrained supply and stable demand across several regions. Looking ahead, we remain constructive on listed real estate given attractive valuations, improving capital market conditions, resilient cash flows, and visible earnings growth catalysts, while maintaining a preference for high-quality companies with strong balance sheets, durable income streams, and exposure to structurally supported sectors such as data centers, healthcare, industrial/logistics, selected residential, and high-conviction retail opportunities.