An international property manager has labelled the long-term outlook for real estate investment trusts (REIT) compelling despite current geopolitical and economic headwinds, such as the conflict in the Middle East, inflation and the path of interest rates.
LaSalle Investment Management portfolio manager Paul Meierdierck noted the global listed real estate market entered 2026 in a supportive phase. This was driven by improving macroeconomic conditions, moderating supply and attractive valuations.
As such, Meierdierck suggested investors must look beyond immediate volatility when assessing real estate assets.
“While we acknowledge market dynamics can change quickly and geopolitical events are fluid, we typically view geopolitical events such as these as part of the ‘wall of worry’ markets typically climb over time, with pullbacks presenting potential longer-term investment opportunities,” he said.
“The global listed real estate market entered 2026 in a more supportive phase due to improving macroeconomic conditions, moderating supply and attractive valuations, creating a compelling long-term outlook for REIT investors.”
According to the manager, listed real estate is currently trading at attractive levels relative to both broader equities and private property markets. To this end, Meierdierck indicated REITs are trading at a discount of more than 20 per cent to the broader equity market.
He also recognised the sector is beginning to benefit from a broader rotation in equity markets, with value assets gaining renewed attention after several years of growth stocks dominating performance.
“For much of the past decade, growth significantly outperformed value and REITs were caught up in that trend,” he pointed out.
“What we are seeing now is the early stages of a rotation where value sectors are starting to regain investor interest and that’s beginning to show up in the listed property market.”
While sectors such as data centres and healthcare remain long-term growth areas, opportunities are emerging where valuations have been heavily discounted.
Meierdierck observed office markets in key global cities are stabilising as companies complete the process of adjusting to hybrid work models.
“With REITs still trading at a substantial discount to broader equities, we believe there is meaningful room for further upside as the cycle continues to normalise,” he noted.