UBS Equities-Global Real Estate Strategy _Record four-year lag - Tide tur...-119698342

ab12 January 2026Global ResearchGlobal Real Estate StrategyRecord four-year lag - Tide turns, laggard returns?AI drove global equities but not data centre REITs, worst performing subsector Global real estate has underperformed global equites four years in a row (2022-2025), a record stretch of underperformance based on our data (covering the last 30+ years). The global real estate index gained +11.0% in 2025, underperforming global equities by 12.4% points. Resilient economic data and sustained optimism around AI drove broader markets in 2025 -- a narrative that did not benefit real estate as data centre was the worst performing REIT subsector (-13.7%). Regionally, Asia (+29.5%) outperformed, followed by Europe (+7.8%) and US (+2.7%). By sector, Diversified (+29.8%) and Healthcare (+29.7%) were the best performers. The new UBS Annual 2026 Investor Survey points to a constructive outlook heading into 2026, as 53% of surveyed investors expect listed real estate to outperform as positive inflows return.Year in review – Diversified top sector and Japan Devs top regionBy sector, Diversified (+29.8%) and Healthcare (+29.7%) performed best, Data Centers (-13.7%) and Self Storage (-7.3%) worst. By region, JP Devs (+54.0%) and HK Prop (+36.6%) outperformed. Germany (-13.4%) and Sweden (-8.6%) underperformed.Global Valuation (excluding emerging markets)We estimate a ~12% return (end-31 Dec 2025), 6.8% discount to our NAV estimate, 2025E P/E at 20.4x, 2025E DPS yield at 3.7% and 2025-26E EPS growth of 7.2%Global Top Picks Keppel DC REIT, CapitaLand Ascendas, Mapletree Logistics (SG); Swire Properties, Sino Land (HK); CR Land (China); Sumitomo Realty, (JP); Goodman, Dexus, Centuria Industrial, HomeCo Daily Needs (AU); Emaar Properties, Shurgard (EMEA); Brixmor, CareTrust, Equity Residential, Four Corners Property Trust, Digital Realty, American Tower (US).Figure 1: Global real estate minus global equities performance (%)-40%-30%-20%-10%0%10%20%30%19941995199619971998199920002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022202320242025Four years of continued underperformance (a record stretch of under-performance based on our 30 + years of data)Source: Refinitiv, UBS. FTSE EPRA Nareit Developed $ index for Global real estate and FTSE World $ Index for Global Equities. Based on total return indices.This report has been prepared by UBS AG London Branch. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES, including information on the Quantitative Research Review published by UBS, begin on page 68. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.EquitiesGlobalReal EstateCharles Boissier, CFAAnalystcharles.boissier@ubs.com+44-20-7568 4415John Lam,