Global REITs posted modest gains in Q2 2025, supported by stabilizing rate expectations and resilient equity markets. While geopolitical tensions and trade policy shifts introduced volatility, sector-specific tailwinds and disciplined capital allocation continue to support long-term growth.
United States
- U.S. REITs underperformed equities but offered compelling value with improving fundamentals and moderating rates.
- Data centers and New York offices led; Sunbelt apartments and cold storage lagged.
- Outlook remains constructive with attractive valuations, accelerating earnings growth, and potential for increased interest in private equity.
Europe
- Europe led global returns in Q2, boosted by currency tailwinds and strong multifamily and logistics performance.
- Valuations remain appealing despite macro and political risks.
- The focus is on structurally growing sectors like data centers, logistics and select retail.
Asia Pacific
- APAC REITs proved defensive amid tariff volatility, with Japan, Australia, and Hong Kong outperforming.
- Japanese developers and hotel REITs rebounded; Australia’s housing and retail sectors gained from rate cuts.
- Across the region, we favor high-yield, low-vacancy sectors with structural support.
REITs with strong balance sheets and sector-specific tailwinds are well positioned to navigate the second half of the year. We remain focused on fundamentals, on disciplined capital allocation, and on identifying opportunities in which public market valuations diverge from private market realities and in which we are seeing increasing rates of rental growth like in the self-storage and apartment sectors. REITs do not sit in the forefront of the tariff storm—unlike other recent market turmoil, such as the COVID-19 pandemic or the global financial crisis. Investors can look to REITs in this environment to potentially provide predictable cash flows driven by defensive demand characteristics and limited supply additions in 2026 and 2027 to provide ample growth.
The views expressed herein are those of PGIM Real Estate investment professionals at the time the comments were made and may not be reflective of their current opinions and are subject to change without notice. Neither the information contained herein nor any opinion expressed shall be construed to constitute an offer to sell or a solicitation to buy any security.
Certain information in this commentary has been obtained from sources believed to be reliable as of the date presented; however, we cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is current as of the date of issuance (or such earlier date as referenced herein) and is subject to change without notice. The manager has no obligation to update any or all such information, nor do we make any express or implied warranties or representations as to the completeness or accuracy. Any projections or forecasts presented herein are subject to change without notice. Actual data will vary and may not be reflected here. Projections and forecasts are subject to high levels of uncertainty. Accordingly, any projections or forecasts should be viewed as merely representative of a broad range of possible outcomes. Projections or forecasts are estimated, based on assumptions, subject to significant revision, and may change materially as economic and market conditions change.
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