In the second quarter of 2024, global real estate investment trusts (REITs) traded down more than 2%, as investors worried about the pace of interest rate cuts in the midst of a relatively strong economy and somewhat sticky inflation. On a U.S. dollar basis, all regions experienced flat to negative nominal returns, with Asia lagging, down approximately 8%. Asia's real estate returns were weighed down by Japan's, which were more than 12% due to currency depreciation and some profit taking after a strong first quarter.

Relative performance versus benchmark was positive for the quarter. We generated alpha through stock selection within global data centers—a timely conviction underweight on U.S. industrial. We also added alpha in Canada and Australia for the quarter.

An underweight on U.S. apartments and stock selection in healthcare were detractors from performance in the portfolio, as was self-storage in Belgium.

• The U.S. REIT market was roughly flat in the second quarter of 2024—at −0.5%—and had a sizable drop in April followed by consecutive monthly gains in both May and June.
• The European public real estate market suffered a reversal in June after a strong relative performance in the first half of the year up to that point. Europe saw a US dollar gross total return of −4.7% for the month of June as bond yields in the region edged back up and political risk reappeared with upcoming elections in France and the UK.
• The FTSE EPRA Nareit Asia benchmark declined 8.3% during the second quarter of 2024 in sharp contrast to the other regional indexes (i.e., North America and the European Union), which were relatively flat. The