Following an uptick in uncertainty, real estate investment trusts (REITs) appear attractively priced and poised to benefit. PGIM Real Estate’s Rick Romano, Daniel Cooney and Michael Gallagher explore the current market environment, including region-specific insights on the most compelling global REIT opportunities.
- United States: Volatility dominated the first quarter, but we saw broad-based selling as a sentiment-driven development rather than a structural break. We believe REIT valuations are at very attractive levels, heightening reversion potential following years of underperformance versus equities. Demand for sectors such as senior housing and health care remain underpinned by secular and demographic drivers.
- Europe: Despite slower economic growth and heightened geopolitical risks, the region offers attractive cash flow yields, bolstered by expectations for further ECB and BOE rate cuts. M&A activity continues to ramp up, including two UK industrial deals in 2025. We expect such transactions to ramp up across all regions as private players continue to target undervalued public assets.
- Asia Pacific: Singapore and Hong Kong are relatively well-insulated from the announced tariffs. We are constructive on self-storage and industrial sectors. Fed cuts should provide a supportive backdrop but monitoring tariffs and regional political shifts remain key. J-REITs continue to benefit from significant corporate governance improvements. Australia also presents opportunities in residential real estate and data centres.
Read on for PGIM Real Estate’s latest global real estate securities outlook highlights.
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