REITs poised for gains despite Iran uncertainty, says LaSalle

Binaya Dahal

Journalist

2 April 2026

The escalating conflict in Iran has created global uncertainty but long-term investors in real estate investment trusts (REITs) should look past the near-term headwinds, says Paul Meierdierck, Portfolio Manager at LaSalle Investment Management.

He said while market dynamics can change quickly and geopolitical events are fluid, events such as these are viewed as part of the “wall of worry” which markets typically climb over time, with pullbacks presenting potential longer-term investment opportunities.

“The global listed real estate market entered 2026 in a more supportive phase due to improving macroeconomic conditions, moderating supply and attractive valuations, creating a compelling long-term outlook for REIT investors,” Meierdierck said. 

He noted listed real estate is currently trading at attractive levels relative to both broader equities and private property markets.  “REITs are trading at more than a 20 per cent discount to broader equity market and valuations look quite compelling today.”

 “Real estate has materially repriced and public REITs are now offering what appears to be a margin of safety relative to broader equities, while also trading at discounts to private real estate.” 

 Meierdierck said REITs, for much of the past decade, were caught up in that trend where growth significantly outperformed value but “what we are seeing now is the early stages of a rotation where value sectors are starting to regain investor interest, and that’s beginning to show up in the listed property market.” 

He added macroeconomic conditions are also becoming more supportive for real estate investors. “Until the Iran conflict, interest rates had largely stabilised after a period of significant increases, and continue to remain within recent ranges, while credit spreads remain tight, and inflation expectations are well anchored.”

Meierdierck said strong underlying property fundamentals seen in the market, supported by declining new supply, should support rent growth and occupancy across a number of sectors.

“Industrial supply increased rapidly during the low-interest rate period after the COVID-19 pandemic, but that excess supply is now being absorbed and deliveries are expected to bottom out this year,” he said.

“Markets tend to be forward looking, and we’re already seeing industrial property begin to outperform in anticipation of that tightening supply environment.” 

While the combination of improving fundamentals and discounted valuations provides a favourable outlook for the asset class, Meierdierck said the recovery is still in its early stages.

“With REITs still trading at a substantial discount to broader equities, we believe there is meaningful room for further upside as the cycle continues to normalise,” he said.