REITs Become Move in Ready
PGIM Real Estate explores the commercial real estate outlook for 2024.
After a volatile 2023 driven largely by the uncertainty around interest rates and inflation, the REIT market saw green shoots early in the year as the inflation data began to improve. A moderating interest rate outlook and a resilient labour market should create a good backdrop for REITs.
U.S. REITs bounced back during the fourth quarter finishing the year in positive territory as the Federal Reserves (Fed) signaled the end of the rate hikes and the potential for cuts in 2024. The European REIT market rebounded since the second quarter. Countries that struggled in 2022, namely Germany and Sweden, were outperformers in 2023 as interest rate expectations began to soften. Asian REITs however, lagged their counterparts in the fourth quarter and the year primarily due to Hong Kong, where the slowdown in Chinese economic growth continued to be the main detractor.
Read on to find out where the key opportunities and risks are in the U.S., Europe and Asia Pacific REIT markets in the road ahead as the rate-hike cycle winds down.
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