Last year was the worst year of performance in the history of global real estate securities — and one of the worst years in broad-market indices. In addition to poor performance, 2008 also marked a period of unprecedented stock market volatility for both real estate and broad-market stocks. For the year, global real estate stocks in the UBS Investors Index were down 42.6 percent, compared with a decline of 38.3 percent for the MSCI World Equity Index. (All returns are stated in local currencies.) The only group of real estate stocks to beat their broad market index was in Hong Kong, where they lost 41 percent but were still 10 percent ahead of the local market.

One of the striking things about 2008 is that real estate stocks acted much like other equities — all were hit hard, and there was less dispersion of return than typically seen, both between real estate stocks and broad-market equities and among regions within the real estate group. Real estate stocks in different