Key Takeaways
- • Global REITs trade at multi-decade valuation lows relative to broader equities while fundamentals strengthen, positioning 2026 as a potential inflection point for listed real estate, according to Hazelview Investments' 2026 Global Public Real Estate Outlook Report.
- • REITs are pricing at double-digit discounts to intrinsic value and have underperformed global equities since 2020, with US REITs experiencing the largest valuation decline of any major equity segment since 2021.
- • New supply as a share of existing stock across retail, industrial, residential, and office property is forecast to decline materially in developed markets, potentially reaching all-time lows in the US, Europe, Canada, Australia, and parts of Asia-Pacific.
- • Occupancy rates are trending above historical averages across major property types, supporting pricing power and expectations for stronger rent growth as the sector enters 2026.
- • Companies are responding to the valuation disconnect through share repurchases and privatization activity as public market valuations remain persistently below private market asset values.
Summary
Global REITs are trading at historically depressed valuations despite improving operational fundamentals, creating what Hazelview Investments characterizes as a critical mismatch that could reset market sentiment in 2026. The firm's analysis reveals that listed real estate has underperformed broader equities continuously since 2020, absorbing disproportionate losses from the pandemic shock and subsequent monetary tightening cycles. The valuation gap has widened notably in the US, where REITs have registered the largest equity segment decline since 2021, yet the report identifies this as an "atypical" stretch approaching a turning point as valuations, fundamentals, and capital discipline realign.
The fundamental backdrop supporting a revaluation case is multifaceted. New supply growth across key property types—retail, industrial, residential, and office—is forecast to decline materially across developed markets, with several regions including the US and Europe potentially reaching all-time supply lows as a percentage of existing stock. Concurrently, occupancy rates are tracking above historical averages, reinforcing tenant demand and bolstering landlord pricing power. This combination of constrained supply and robust demand is expected to drive stronger rent growth momentum, improving earnings visibility for the sector heading into 2026.
The pricing disconnect between public and private markets has already triggered a market response. REIT operators are executing share repurchases and pursuing privatization transactions as management teams recognize that public valuations are trading substantially below private asset values. With global REITs currently priced at double-digit discounts to intrinsic value, the report suggests institutional investors face a window to accumulate exposure before the market reprices fundamentals. The outlook for 2025 acknowledges near-term macro volatility driven by trade uncertainty and shifting monetary policy, yet positions these headwinds as temporary relative to the longer-term supply-demand tailwinds and valuation reset potential embedded in listed real estate.
The fundamental backdrop supporting a revaluation case is multifaceted. New supply growth across key property types—retail, industrial, residential, and office—is forecast to decline materially across developed markets, with several regions including the US and Europe potentially reaching all-time supply lows as a percentage of existing stock. Concurrently, occupancy rates are tracking above historical averages, reinforcing tenant demand and bolstering landlord pricing power. This combination of constrained supply and robust demand is expected to drive stronger rent growth momentum, improving earnings visibility for the sector heading into 2026.
The pricing disconnect between public and private markets has already triggered a market response. REIT operators are executing share repurchases and pursuing privatization transactions as management teams recognize that public valuations are trading substantially below private asset values. With global REITs currently priced at double-digit discounts to intrinsic value, the report suggests institutional investors face a window to accumulate exposure before the market reprices fundamentals. The outlook for 2025 acknowledges near-term macro volatility driven by trade uncertainty and shifting monetary policy, yet positions these headwinds as temporary relative to the longer-term supply-demand tailwinds and valuation reset potential embedded in listed real estate.
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