Global Real Estate slowed down as yields across major regions have increased and the 3% US 10-Year Yield barrier has been reached again.
The 10-year US treasury rate rose by 20 bps from 2.86% to 3.06%. As consequence, Global Real Estate strongly underperformed the Global Equity and the positive momentum since March has been reversed.
Globally, the risk premia of listed real estate has dropped below to its long term average, particularly in the US. We also observed transaction activity slowing down despite solid fundamentals.
Since the start of 2018, the North American REITs markets have shown disappointing returns and volatility. However, from mid-April until mid-August, we observed the strongest rebound in the United States. The EPRA United States Index grew by 25% (in EUR, Net) while Europe gained only 3.8% and Asia +5%. Following September’s drop, the spread between Global Equity and Global Real Estate has widened while volatility level remained similar.