Senior housing and retail lead the pack for 2026-30 returns

Real estate returns over the coming years will be dominated by the income component, as an increase in cap rates to fully reflect the higher yield environment offsets support for values from rising rents. As a result, all-property total returns will average just 5.2% p.a. over 2026-30. Offices and industrial will be the major drags on that figure, with self-storage looking especially unattractive. Meanwhile, apartments should outperform with returns of around 6%, while retail looks better placed to generate returns of nearly 7%. But the top performer is undoubtedly set to be senior housing, where we are projecting annual average returns of 11.5%.