Here are the global real estate forecasts for 2025 according to RBC by Investing.com

Investing.com – In its Global Outlook 2025 report, RBC Capital Markets said it expects diverging paths for Canadian (CDN) and U.S. REITs in 2025, supported by valuation dynamics, monetary policy shifts and sector-specific fundamentals.

Canadian REITs have underperformed their U.S. counterparts in 2024, with the index up just 1% year-to-date compared to the index’s 13% rise. However, RBC sees a stronger 2025 setup for Canadian REITs, driven by attractive valuations and expected monetary policy easing from the Bank of Canada (BoC).

“With most subsectors still positioned for decent earnings growth, valuations looking increasingly attractive, and monetary policy easing further by the Bank of Canada, we see support for stronger returns from CDN,” RBC analysts led by Pammy Beer said in the note. REIT in 2025.” .

U.S. REITs, facing stretched valuations and persistent headwinds from rising bond yields, are expected to deliver flat to slightly positive total returns next year, which could lag the broader U.S. stock market.

Sector outlook underscores strong prospects for Canadian seniors housing, supported by accelerating demand and weak new supply.

RBC expects an average growth of 11% in same-ownership net operating income (NOI) for retirement homes in 2025, with net operating income growth for long-term care facilities expected to range between 1% and 2%.

Meanwhile, Canadian industrial REITs are expected to benefit from significant market opportunities, although near-term pressures include rising availability and moderating demand.

In the United States, healthcare REITs have a “healthy operating environment and strong long-term outlook,” especially among those with large investment portfolios.

Meanwhile, net leased REITs are poised for acquisition volume growth as capital costs improve, but performance will remain tied to yield curve movements.

Other subsectors, such as US manufacturing and warehousing, are likely to face continued pressure until mid-2025 due to demand uncertainty.

RBC’s basket of global REITs balances sector fundamentals, growth prospects and valuation.

Notable picks include Dream Industrial REIT (TSX:) (DIR), Boardwalk REIT (TSX:) (BEI), and Chartwell Retirement Residences (TSX:) (CSH) in Canada, along with its headquarters in the United States. Gaming and entertainment features (NASDAQ:) and Healthpeak Properties (NYSE:).

American Health Care Fund Inc (NYSE:) (AHR) was highlighted as among the picks with “the best growth prospects not only in the sector but also in the industry in our view,” analysts said.

The report also warns of challenges in Canadian office markets, where the pace of leasing remains slow, and manufactured housing in the United States, which is facing stock picking difficulties despite favorable fundamentals.