Global real estate investors have endured a volatile market. In the past few years, talk of recession risk and various structural factors, primarily rising interest rates and rising bond yields, have fueled a somewhat downbeat sentiment toward global real estate. Permanently changing work and spending habits ended a yearslong streak of robust performance across most subsectors, too. However, this is the year that story changes, according to PGIM Real Estate. Investors will need to prepare for a much greater level of selection than in years past.

In its paper, "Changing the Narrative: Constructing a New Portfolio for the Next Cycle", PGIM Real Estate posits that global real estate markets are about to hit a turning point—and the entry point for investors is now. It presents a large volume of research to back this view up, ranging from observations on the cyclical nature of property value and the drivers behind this, to a granular look at how the dynamics of investment opportunities can differ on a city-by-city basis. Many of the insights and ideas presented in this paper can be incorporated into investment processes today.

This Special Report contains highlights from the paper followed by an interview with PGIM Real Estate Global Head of Investment Research, Peter Hayes, PhD. Here you will find deeper thinking on some of the subjects raised in the paper, providing a fuller picture of how PGIM Real Estate expects the next few years to play out.