Listed real estate

18 September 2026, 08:05 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, engage in acquisitions Forecasts through accretive issuance, and demonstrate strong pricing power, 16 Sep 26 6,889 profitable pipelines, attractive yield gaps, and robust cash flows. We remain selective toward companies still trading at a discount to Dec 26 8,000 net asset value (NAV), as they may be value traps unless they can Mar 27 8,600 successfully grow their businesses. Jun 27 8,800

• Nevertheless, we expect overall real estate values to continue Sep 27 9,000 appreciating over the medium term, with further rental growth Source: MSCI, Bloomberg, UBS anticipated unless interest costs rise more significantly. Increasing transaction volumes in direct commercial real estate are supportive, and recent data point to a sustained recovery in activity. Earnings yields relative to equities remain attractive, in our view.

• Given a mixed and volatile economic backdrop, we continue to see widening and shifting relative returns across markets. We currently favor the relatively inexpensive UK market, as interest rates have already increased significantly. Continental Europe remains our preferred European exposure, where short- term inflation uncertainty should diminish. However, changing expectations regarding significantly higher energy prices continue to Preferences create uncertainty. In Asia, we prefer developers over REITs, as the latter exhibit weak momentum in a rising interest rate environment. Relative to our global benchmark, FTSE EPRA/ We maintain our preference for US REITs despite their recent volatility, Nareit Developed Total Return Index in local as solid fundamentals remain supportive. In Australia, a peak in currencies. interest rates and lower financing cost pressures have improved prospects, although uncertainty remains high. We remain cautious Attractive on Japanese REITs due to volatile bond market conditions. • Continental Europe • Hong Kong Developers • Japanese Developers Market review At the beginning of 2025, listed real estate outperformed equities, • Singapore Developers supported by its defensive characteristics, expectations of central bank • UK rate cuts, and robust market fundamentals. However, volatility returned as long-term US bond prices underwent a technical correction. The • US outlook has since improved, with concerns about the US economy easing despite ongoing geopolitical tensions. Yet, 2026 appears to be repeating Unattractive the now-familiar pattern of listed real estate underperforming while • Australia the broader technology sector continues to attract capital. However, • Hong Kong REITs transaction volumes in physical real estate are improving rapidly. In 2025, global direct real estate transaction volumes rose by approximately 15% • Japanese REITs year over year, and we expect even stronger growth in 2026, as stagflation • Singapore REITs risks appear to be diminishing. Transaction volumes in the first half of the year have been encouraging. Trade uncertainty and corporate indecision appear to have receded, and tariffs are no longer a significant headwind for industrial real estate, particularly given the data center boom. We expect real estate stocks to perform relatively well as a store of value as soon

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

as expectations of a peak in inflation materialize. Current valuations, as Global listed real estate versus equities measured by earnings yields, remain attractive, in our view, and real estate Index: 12 January 2005 = 100; total return in USD has recently outperformed global equities.

A steeper US yield curve is not necessarily negative; its implications depend on the reason for the steepening, whether it reflects expectations of a stronger economy or tighter liquidity conditions. The previous inversion of the yield curve was a key factor in the sector's underperformance relative to global equities, as it increased opportunity…