Research Briefing | Jan 28, 2022

Global real estate to outperform bonds and equities

Global | Real estate to outperform bonds and equities

Global real estate returns are looking healthy over the next five years, providing a strong relative performance versus bonds and equities. We forecast total returns for global direct real estate and REITs to average 6.5% to 7% annually over 2022-2026, significantly above bonds and equities, which are projected to return 0.7% and 2.5% per annum, respectively.

What you will learn:

  • We also expect global economic expansion to support real estate income growth while structural forces keep long-run interest rates low, thus moderating the near-term impact of rate increases on property yields.
  • That said, risks from persistently higher inflation remain.
  • Plus, there are uncertainties regarding the longer-term real estate outlook, such as the effect of structural forces on demand and the degree to which the climate transition affects obsolescence and future supply.
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