Why global real estate is now outperforming the U.S.

Global real estate is on pace to outperform U.S. real estate for the first time since 2017.

Through the third quarter of this year, global REITs are up 10.4%, compared with U.S. REITs, which are up 4.5% over the same period.

What’s notable, given that U.S. markets account for over 60% of global real estate, is how strongly Asia Pacific, Europe and emerging markets have performed.

Asia Pacific leads with a 27.4% gain, followed by Europe at 17.9% and emerging markets at 16.2%.

This is in stark contrast to recent history, when the U.S. served as a safe haven, offering solid growth compared with global markets. Asia faced political turmoil, and Europe struggled with slower growth.

Over the past five years, U.S. REITs returned 7% annually, while Europe and emerging markets had negative annual returns, and Asia posted just 3.5% returns.

This year marks a reversal of recent trends. 

While political uncertainty has dampened U.S. growth expectations, international markets are benefiting from a significantly improved outlook. For example, after four consecutive years of double-digit negative returns, China has returned nearly 30% on indications growth there has bottomed. Japan, Spain, Hong Kong, and the Netherlands have also all posted returns of more than 20% this year.

Country total returns in local currency-YTD 2025⁽¹⁾

At September 30, 2025. Source: Cohen & Steers.
Data quoted represents past performance, which is no guarantee of future results. The information presented above does not reflect the performance of any fund or other account managed or serviced by Cohen & Steers, and there is no guarantee that investors will experience the type of performance reflected above. There is no guarantee that any historical trend illustrated above will be repeated in the future, and there is no way to predict precisely when such a trend might begin.
(1) The FTSE EPRA Nareit Developed Real Estate Index – net is an unmanaged market-capitalization-weighted total-return index, which consists of publicly traded equity REITs and listed property companies from developed markets and is net of dividend withholding taxes.

Favorable valuations, improving fundamentals, and a positive macroeconomic backdrop for many countries are behind the comeback in international markets.

First, Europe and Asia were trading at glaringly discounted valuations at the start of the year.

U.S. REITs began the year trading at a slight premium to net asset values. By comparison, our European and Japanese universe was trading at 23 and 29% discounts, respectively.

Those discounts have since narrowed slightly, but we believe international REITs are still relatively attractive.

Second, in Europe and Asia, most alternative sectors—such as data centers, storage, towers, and health care— are still maturing, creating favorable supply-demand dynamics.

Heightened external uncertainty is also prompting governments across Europe and Asia to adopt more proactive policies to stimulate domestic consumption to support economic growth. And in Japan specifically, companies are placing greater emphasis on corporate governance and reform initiatives aimed at enhancing shareholder returns. We see this theme broadening out across Asia.

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Where do we go from here?

While some uncertainty remains, such as whether Europe can increase productivity and promote economic growth, we believe global REITs are well positioned.

Most countries still trade at significant discounts to NAV. Balance sheets remain strong. And we believe investors have been overallocated to the U.S., so some normalization can continue.

None of this is to say we believe U.S.-listed real estate is expected to underperform. Global markets are just catching up.

In fact, some of the same tailwinds we see internationally are trends that are favorable for U.S. REITs that are still trading at notable discounts relative to the broader equities market.

That includes secular drivers such as AI and data centers, the needs of an aging population for more senior living facilities, and the evolution and reemergence of brick-and-mortar retail.

At September 30, 2025. Source: Cohen & Steers, Evercore ISI.
The views and opinions are as of the date of publication and are subject to change without notice. There is no guarantee that any historical trend illustrated above will be repeated in the future, and there is no way to predict precisely when such a trend might begin. There is no guarantee that any market forecast set forth in this presentation will be realized.

A favorable macroeconomic backdrop, in which growth slows and yields decline, has historically benefited commercial real estate. This is the backdrop in many markets across the globe, though notably not all, so it’s critical to embrace active management given those differences.

Recent performance reinforces our long-term view: diversification globally is essential amid diverging economic, technological, and policy cycles.

Watch September 2025 The Real Estate Reel: As private real estate bottoms, an opportunity emerges in retail

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