After spending much of the decade trailing broader equities, public real estate may finally be nearing a turning point.
That’s the view from Hazelview Investments’ newly released 2026 Global Public Real Estate Outlook Report, which argues that the forces shaping global REIT markets are beginning to shift. Using an active management lens, Hazelview’s public securities team points to an environment where supply, demand, valuation, and capital discipline are increasingly coming into alignment — and where the long-standing gap between public and private real estate values is becoming harder to ignore.
Through 2025, global REITs faced trade uncertainty and shifting monetary policy, but improving financial conditions helped the asset class finish the year with a high single-digit return in local currency terms.
Results varied meaningfully by region. Japan, Hong Kong, and Singapore led returns, while Canada and the U.K. also outperformed the global benchmark. Continental Europe lagged, with the US posting the weakest performance among major regions. At the sector level, healthcare stood out on the strength of senior housing fundamentals, while cold storage, life science, data centres, and residential REITs underperformed.
A Cycle Nearing an Inflection Point
Since 2020, global REITs have underperformed broader equities, reflecting the outsized impact of the pandemic and subsequent monetary tightening on real estate. In the US, REITs have seen the largest valuation decline of any major equity segment since 2021.
Hazelview says that period of atypical performance may be nearing an end. Strengthening fundamentals, paired with what the firm views as compelling valuations, are creating conditions for REITs to begin making up lost ground in 2026 and beyond.
Supply, Demand, and a Valuation Disconnect
The outlook highlights a tightening supply backdrop across global real estate markets. New supply across major property types — including retail, industrial, residential, and office — is forecast to decline materially in most developed regions, potentially reaching all-time lows in markets such as the U.S., Europe, Canada, Australia, and parts of Asia-Pacific. Demand, meanwhile, has remained resilient, with occupancy rates trending above historical averages.
On the valuation side, Hazelview notes that global REITs are trading at multi-decade lows relative to broader equities and at a double-digit discount to intrinsic value. The firm points to rising share buybacks and privatization activity as companies respond to the persistent disconnect between public market pricing and private market asset values.
Looking for Opportunity
Against that backdrop, Hazelview points to opportunity across several segments of the public real estate market. Industrial real estate across North America, Europe, and Japan is benefiting from lower new supply and improving leasing conditions, while senior housing in North America continues to be supported by favourable demographics and constrained development.
The firm also highlights continued demand for data centres in markets such as the US, Hong Kong, and Singapore, driven in part by AI adoption. Residential real estate in Australia and Germany rounds out the picture, with supply-demand imbalances expected to support stronger rental growth.
Taken together, Hazelview’s outlook reflects a disciplined, long-term approach to public real estate investing — and a view that 2026 could mark a meaningful shift for an asset class that’s spent much of the decade on the back foot.
