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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