Listed real estate

21 August 2026, 07:39 UTC Chief Investment Office GWM Investment Research

Global listed CIO View: Listed real estate Thomas Veraguth, Strategist, UBS Switzerland AG

FTSE EPRA/Nareit Developed Index • We favor companies that pursue growth and engage in acquisitions Forecasts with accretive issuance and demonstrate strong pricing power, 19 Aug 26 7,217 profitable pipelines, attractive yield gaps, and robust cash flows. We remain selective toward companies still trading at a discount to Sep 26 7,500 net asset value (NAV), as they may be value traps unless they can Dec 26 8,200 successfully grow their businesses. Mar 27 8,700

• Nevertheless, we expect overall real estate values to continue to Jun 27 8,900 appreciate, with further rental growth anticipated over the medium Source: MSCI, Bloomberg, UBS term—unless interest costs rise significantly amid heightened volatility. Increasing transaction volumes in direct commercial real estate are supportive and recent data point to a sustained recovery in volumes. Earnings yields compared to equities remain attractive, in our view.

• Given a mixed and volatile economic backdrop, we continue to see widening and changing relative returns across markets. We no longer favor the still relatively inexpensive UK market as interest rates have significantly increased. Continental Europe is our preferred European exposure, where short-term inflation uncertainty is diminishing. Receding expectations for significantly higher energy prices should Preferences support continental Europe in particular. We remain cautious on Singaporean developers and REITs that show weak momentum. Hong Relative to our global benchmark, FTSE EPRA/ Kong developers and REITs are currently more attractively priced, and Nareit Developed Total Return Index in local the market is in a recovery. Fears around mainland Chinese capital currencies. export restrictions, and higher opportunity costs are receding. We come back to US REITs despite their past strong outperformance as Attractive solid fundamentals are supportive. In Australia, a peak in interest rates • Continental Europe and marginal financing costs improved prospects, but are already reflected in current valuations. We remain cautious on Japanese • Hong Kong Developers developers and REITs due to very volatile bond market conditions. • Hong Kong REITs • US

Market review Unattractive At the beginning of 2025, listed real estate outperformed equities, • Australia supported by its defensive characteristics, expectations of central bank • Japanese Developers rate cuts, and robust market fundamentals. However, volatility returned as long-term US bond prices underwent a technical correction. The outlook • Japanese REITs has since improved, with concerns around the US economy easing despite • Singapore Developers ongoing geopolitical tensions. Yet, 2026 seems to be repeating the now-familiar narrative of listed real estate underperforming, while the • Singapore REITs broad technology sector continues to attract capital. However, transaction • UK volumes for physical real estate are rapidly improving. In 2025, global direct real estate transaction volumes rose by approximately 15% year over year, and we expect even better volume growth in 2026—as stagflation risks seem to be diminishing. 1H volumes are encouraging. Trade uncertainty and indecision seem to have receded and tariffs are no longer a significant

This report has been prepared by UBS Switzerland AG. Please see important disclaimers and disclosures that begin on page 6.

headwind for industrial real estate, especially due to the data centers Global listed real estate versus equities boom. We expect real estate stocks to perform relatively well as a store of Index: 12 January 2005 = 100; total return in USD value if expectations for a peak in inflation materialize. Current valuations, as measured by earnings yields, remain attractive, in our view.

A steeper US yield curve is not necessarily a negative; its implications depend on the reason for the steepening—whether it reflects expectations for a stronger economy or a tightening of liquidity. The past inversion of the yield curve was a key factor in the sector’s…