Neuberger Berman Fund Manager Sees Fundamental Support for Global Real Estate

Steve Shigekawa, managing director at Neuberger Berman, joined Nareit for a video interview at REITworld 2017.

Neuberger Berman has a positive outlook for global real estate, based on low interest rates, continued strength in equity and debt markets, and supply that is below long-term averages in most markets, Shigekawa said.

On a regional basis, Neuberger Berman is overweight in U.S. holdings. In Europe, the firm favors Germany—particularly the residential market—as well as France and Spain. In the Asia Pacific region, Australia, Japan and Hong Kong are all of interest, Shigekawa said.

Meanwhile, Shigekawa said REITs are undervalued in the current market. In some cases, they are trading at significant discounts to net asset value (NAV), he added.

“When you think about the amount of capital in the private market looking to invest in high-quality real estate as well as accommodating capital markets, we think that would be supportive of NAV,” Shigekawa said.

In addition, REIT valuations relative to fixed-income alternatives show that yield spreads are wider than they’ve been historically, Shigekawa added.