We believe that developed market real estate investment trusts (DM REITs) are poised for a sustained period of positive performance driven by attractive valuations, subdued development activity, and solid macro fundamentals. This is despite interest rates that are set to remain well above pre-pandemic norms.
Recent bank funding turmoil is likely to lead to tighter lending conditions in commercial real estate markets in the Asia-Pacific region.
We now expect eurozone all-property capital values to fall by 10% this year, after a 3% correction last year, and see slower growth in 2024. This is a sharper decline than we saw during the global financial crisis (GFC)
We expect real estate values to correct sharply in 2023, but pressure should gradually alleviate as policy rates peak.
