Key Takeaways
- • Hazelview Investments' 2026 Global Public Real Estate Outlook argues that public real estate may regain momentum in 2026 as fundamentals improve while listed real estate pricing still reflects high investor caution.
- • The report highlights "compelling valuations" in publicly traded real estate securities, which have spent much of the past two years trading at discounts to underlying asset values due to higher borrowing costs and pricing uncertainty.
- • Hazelview favors an active management approach, emphasizing sector rotation, security selection and geographic adjustment over index-only REIT exposure.
- • The outlook frames listed real estate as more than a yield instrument, pointing to valuation discipline and structural demand trends as potential performance drivers.
- • Key risks include borrowing costs still above pre-2022 levels, refinancing pressure for certain owners, and mixed regional growth forecasts, which could keep public real estate volatile.
Summary
Hazelview Investments' 2026 Global Public Real Estate Outlook suggests public real estate markets may be setting up for a stronger year. According to the report, the sector is emerging from several years of rising interest rates, uneven economic growth and pressure on property valuations. The firm points to improving fundamentals in key property sectors, while public-market pricing still reflects considerable investor caution. The gap between those two conditions may create opportunities for investors willing to re-engage with listed real estate.
Publiclytraded real estate securities have spent much of the past two years trading at discounts to their underlying asset values, largely because of higher borrowing costs and uncertainty around property pricing. If those headwinds stabilize, the report suggests discounted REIT valuations could offer long-term investors an attractive entry point, particularly those seeking income and portfolio diversification. Supply constraints in certain property types and strengthening demand in others mean real estate segments are not expected to move in lockstep, reinforcing the view that sector selection matters and broad index exposure may not capture the best opportunities.
The report's emphasis on active management is a notable element of the outlook. Passive REIT products have grown in popularity among retail investors, but volatile interest-rate expectations and uneven regional recoveries could make index-only exposure less predictable. Hazelview's approach implies that identifying mispriced securities, rotating among property types and adjusting geographic exposure could be central to generating stronger risk-adjusted returns.
For advisors, the report provides support for revisiting real estate allocations after a period in which many investors reduced exposure. It also offers a framework for client discussions that positions listed real estate not simply as a yield instrument but as a sector where valuation discipline and structural demand trends may drive performance.
The outlook acknowledges remaining risks. Borrowing costs remain higher than in the pre-2022 era, refinancing schedules are a concern for certain property owners, and economic growth forecasts are mixed across regions. These uncertainties mean public real estate may continue to experience periods of volatility. Hazelview's view, however, is that much of that risk is already reflected in market pricing.
Publiclytraded real estate securities have spent much of the past two years trading at discounts to their underlying asset values, largely because of higher borrowing costs and uncertainty around property pricing. If those headwinds stabilize, the report suggests discounted REIT valuations could offer long-term investors an attractive entry point, particularly those seeking income and portfolio diversification. Supply constraints in certain property types and strengthening demand in others mean real estate segments are not expected to move in lockstep, reinforcing the view that sector selection matters and broad index exposure may not capture the best opportunities.
The report's emphasis on active management is a notable element of the outlook. Passive REIT products have grown in popularity among retail investors, but volatile interest-rate expectations and uneven regional recoveries could make index-only exposure less predictable. Hazelview's approach implies that identifying mispriced securities, rotating among property types and adjusting geographic exposure could be central to generating stronger risk-adjusted returns.
For advisors, the report provides support for revisiting real estate allocations after a period in which many investors reduced exposure. It also offers a framework for client discussions that positions listed real estate not simply as a yield instrument but as a sector where valuation discipline and structural demand trends may drive performance.
The outlook acknowledges remaining risks. Borrowing costs remain higher than in the pre-2022 era, refinancing schedules are a concern for certain property owners, and economic growth forecasts are mixed across regions. These uncertainties mean public real estate may continue to experience periods of volatility. Hazelview's view, however, is that much of that risk is already reflected in market pricing.
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