Listed REITs have faced headwinds the past 18 months, with stickier-than-anticipated inflation requiring continued hawkish bank rhetoric, increasing upward pressure on bond yields and negative pressure on real estate values and REIT stock prices, according to Principal Asset Management. The prospect of a banking crisis–driven credit crunch has added to the pressure on the capital-intensive real estate sector.
Amidst the bearish sentiment toward real estate, a compelling opportunity to own REITs has emerged. The deeply discounted REIT market has largely priced in the challenges for real estate of higher rates and tighter credit markets.
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