The FTSE EPRA Nareit Developed Extended Index gained 2.8% in July, bringing its 2026 return to 11.9%, while the FTSE EPRA Nareit Developed Index returned 2.7% for the month and has gained 13.2% year-to-date. North America has continued to lead in 2026, with a year-to-date total return of 20.0%, compared to Developed Europe’s 4.1% gain and Developed Asia’s slight 0.3% decline. The FTSE Global All Cap fell 0.2% for the month and is up 11.4% for the year.
Financial markets continue to experience heightened volatility as investors navigate alternating periods of relative stability and renewed conflict in the Middle East, where a lasting resolution remains elusive. Global benchmark bond yields moved higher across major developed markets in July, driven by persistent inflationary pressures and continued geopolitical risk from the crisis in the Middle East.
As reflected in the above chart, lodging/resorts leads global real estate performance in 2026, delivering a year-to-date total return of 34.2%, followed by data centers at 31.2%, and health care at 23.2%. Only two sectors have posted negative returns in 2026, with telecommunications declining 3.7%, and industrial/office mixed falling 1.8%.
Conflict-Driven Performance
As reflected in the above chart, Nareit recently published a market commentary examining the periods of performance that have defined 2026. A strong start to the year where real estate outperformed the broader markets was followed by a sharp market-wide correction in March due to the conflict in the Middle East. During the initial outbreak of violence, Asian and European real estate markets were impacted more severely than North America. After the first ceasefire was declared both equities and real estate rallied, though the rally in real estate was driven by North American outperformance. Conversely, European and Asian real estate markets have struggled to recover their early-year gains. With a resolution to the conflict proving elusive, and the ensuing market volatility and energy market uncertainty, Nareit expects these distinct periods of performance to remain of interest to investors.
Regional Breakdown
North America
As shown in the table above, North America posted a total return of 2.3% in July and continues to outperform on a year-to-date basis with a return of 20.0%. Lodging/resorts continues to lead in North America, returning 48.4% followed by data centers gaining 33.0%.
Developed Europe
Developed Europe rose 3.6% in July and has returned 4.1% year-to-date, led by industrial with a total return of 17.3% and retail climbing 15.0%. Industrial returns in Europe benefited from a deal to acquire the largest constituent, as the parties reached agreement in early August.
Developed Asia
Developed Asia gained back most of their year-to-date losses in July, returning 3.8%, and is now essentially flat on the year with a narrow loss of 0.3%. Data centers continue to lead in Asia, with an 8.3% year-to-date total return, followed by retail at 2.6%, and health care at 2.5%.