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As we get past the early stages of a rate-cutting cycle, the year ahead will be a pivotal point for REITs globally. With valuations stabilising and capital markets reigniting, opportunities are emerging across diverse regions and sectors.
Over the past couple of years, real estate markets have been upended by major capital market dislocations sparked by high inflation and aggressive central bank tightening responses. After their rollercoaster ride, global REIT markets started stabilising in 2024 as major central banks, including the Federal Reserve, initiated easing.
We think 2025 presents a particularly compelling entry point for REITs, given lower borrowing costs and the potential for higher asset prices on the horizon. Capital markets are opening up, and acquisition activity is on the rise. The high dispersion of returns both across and within REIT property sectors globally creates significant alpha generation opportunities through a fundamental lens.
Read on to find out PGIM Real Estate’s Rick Romano insights on how REITs are poised to benefit from this new cycle.
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References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities. The securities referenced may or may not be held in the portfolio at the time of publication and, if such securities are held, no representation is being made that such securities will continue to be held.
The views expressed herein are those of PGIM investment professionals at the time the comments were made, may not be reflective of their current opinions, and are subject to change without notice. Neither the information contained herein nor any opinion expressed shall be construed to constitute investment advice or an offer to sell or a solicitation to buy any securities mentioned herein. Neither PFI, its affiliates, nor their licensed sales professionals render tax or legal advice. Clients should consult with their attorney, accountant, and/or tax professional for advice concerning their particular situation. Certain information in this commentary has been obtained from sources believed to be reliable as of the date presented; however, we cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is current as of the date of issuance (or such earlier date as referenced herein) and is subject to change without notice. The manager has no obligation to update any or all such information; nor do we make any express or implied warranties or representations as to the completeness or accuracy.
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