Hunting for bargains: REITs trading at big discounts

It’s impossible to look at the property market today without considering the impact of higher interest rates. All else being equal, higher rates put pressure on property prices.
Housebuilders are one obvious area of interest, but I’ve also been looking at REITs. These property investment vehicles allow investors to generate income from a much wider range of property classes.
Looking at the UK Residential amp; Commercial REIT sub-sector right now, almost all of the 50 REITs listed are trading at a discount to book value. In many cases, the discount is over 25%. My research suggests the FTSE 350 REIT sector is trading at a level not seen since 2012.
This cautious market view contrasts with the confident-sounding trading updates issued by many REITs in recent months. Median stats for the sector also look fairly benign:

Are today’s discounted valuations a sign that bigger problems lie ahead, or has the market sell-off gone too far and created opportunities for savvy investors? I think the answer is probably a bit of both, as I’ll explain.
In the remainder of this piece, I’ll highlight some potential concerns and explain what I look...