We expect US REIT returns to improve over the prior decade (8.2 per cent versus 6.9 per cent annualised returns), while global REITs, benefiting from more attractive valuations in international markets, are expected to improve more sharply (8 per cent versus 3.8 per cent annualised returns).
Listed and private real estate returns tend to be similar over long periods, but private real estate typically lags listed real estate due to its slower moving price discovery and transactions.
Listed real estate had sharp declines in 2022, while private real estate had only modest declines. We expect average private core real estate (7 per cent versus 9.7 per cent annualised returns) to trail listed markets as this gap closes.
Jeffrey Palma is head of multi-asset solutions and John Muth is a macro strategist at Cohen & Steers
