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Summary
- PGIM Select Real Estate Fund underperformed the benchmark, the FTSE EPRA/NAREIT Developed Real Estate Net Index, for the quarter.
- Even after recent gains, U.S. real estate investment trusts (REITs) still look attractively priced, trading at about a 4.5% discount to NAV, whereas the long-term average is closer to flat.
- With the bilateral tariff rates now settled with the U.S., the market is moving on to refocus on the tr…
Summary
- PGIM Select Real Estate Fund underperformed the benchmark, the FTSE EPRA/NAREIT Developed Real Estate Net Index, for the quarter.
- Even after recent gains, U.S. real estate investment trusts (REITs) still look attractively priced, trading at about a 4.5% discount to NAV, whereas the long-term average is closer to flat.
- With the bilateral tariff rates now settled with the U.S., the market is moving on to refocus on the trajectory and pace of fed cuts.
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Market Review
North America
Even after recent gains, U.S. real estate investment trusts (REITs) still look attractively priced, trading at about a 4.5% discount to NAV, whereas the long-term average is closer to flat. We anticipate strong earnings growth in 2026 and
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Quick Insights
The fund sees U.S. REITs as attractively valued, trading at a 4.5% NAV discount, and anticipates increased private equity activity, especially as FFO multiple spreads remain historically wide.
The fund is slightly underweight Europe, focusing on sectors with structural growth and resilient occupier trends, while remaining cautious on offices due to high vacancy and capex backlogs.
The fund overweights Japanese developers and Australian residential/retail REITs, favoring those with strong shareholder return policies and benefiting from accommodative monetary policy and resilient domestic demand.