German residential real estate: Defensive albeit not immune - HSBC

Adler Real Estate AG

09/04/2020 09:46

** HSBC keeps a "buy" stance on most German residential real
estate companies as the sector is defensive amid the COVID-19
pandemic, even if it is not immune to the crisis
    ** It says landlords may temporarily suspend rent increases
as a sign of solidarity but says even investment-driven rent
growth will be shifted towards a time when the situation has
normalised
    ** Balance sheets look strong in the sector compared to the
last crisis, even in a bear case scenario, HSBC says
    ** It cuts Deutsche Wohnen  DWNG.DE  to "reduce" from "hold"
due to Berlin's rent freeze law and COVID-19 and downgrades
Vonovia  VNAn.DE  to "hold" from "buy" as it expects a lower
rent growth target
    ** It keeps a "buy" rating on LEG Immobilien  LEGn.DE ,
Grand City Properties  GYC.DE  and TAG Immobilien  TEGG.DE  but
reduces its forecasts slightly
    ** It incorporates Adler Real Estate  ADLG.DE  into ADO
Properties  ADJ.DE  and rates the combined entity "buy" with a
TP of EUR 34 

 ((maria.sheahan@thomsonreuters.com))