Invesco - Wed, 05/08/2024 - 18:30

Real Estate Equity and Debt Securities Market Indicators

Listed real estate common stock ended the quarter trading at a mid-single digit discount to underlying net asset value, however, this average hides a wide dispersion of ratings, with US REITs trading up close to net asset value, but Europe and Asia still offering meaningful discounted valuations, per this metric. Listed real estate companies with favorable cost of capital relative to their private real estate investor peers, combined with strong operating platforms are most likely to find attractive investment opportunities. Ultimately, future real estate valuations will largely be determined by capital market conditions, debt financing costs, and cash flow growth prospects – all of which have a wide range of outcomes over the next 12-24 months but remain more positive where private markets have seen realistic valuation declines as interest rates have risen.¹

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1 Source: Invesco Real Estate using consensus data.


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