The global public real estate (REITs) market is brimming with opportunity, according to Hazelview Investments’ 2025 Global Public Real Estate Outlook Report. Offering a detailed roadmap for investors, the report emphasizes robust fundamentals and compelling valuations in global REITs, even amid a challenging economic environment.
“The global REIT market has reached a pivotal moment, demonstrating resilience and potential for substantial gains,” said Corrado Russo, chief investment officer & head of global securities at Hazelview Investments, in a press release.
The company’s portfolio managers are optimistic about 2025. “With strategic active management and a keen focus on sectors poised for growth, 2025 presents an expansive landscape for investors,” Russo added.
2024 recap
Global REITs rebounded in the latter half of 2024 as central banks initiated interest rate cuts and investor confidence grew. Although a cautious stance from the United States Federal Reserve in December trimmed some gains, REITs closed the year with mid-single-digit positive returns.
Top performers included the U.S. and Australia, with healthcare and data centre sectors outpacing others due to robust demand and limited supply.
Strong fundamentals continue
High occupancy rates and supply constraints are benefitting core property types, trends expected to persist into 2025.
As well, years of strategic debt reduction have positioned REITs to capitalize on lower costs of capital for acquisitions and debt management.
Valuation opportunities
Global REITs are trading at their most attractive valuations relative to global equities in decades.
Hazelview’s analysis reveals that they remain undervalued compared to their intrinsic value, providing an excellent entry point and return for investors.
Key investment themes for 2025
1. Global data centre demand will grow thanks to AI and digital transformation.
2. Senior housing in North America will expand with aging demographics and limited supply.
3. Japan’s recovering tourism and declining new supply will set the stage for hotel growth.
4. Commercial real estate brokers will benefit from increased transaction volumes and outsourcing trends.
5. Residential real estate in Australia and Germany should see opportunities from rental growth and supply-demand imbalances.
