European office property: SocGen initiates with caution

Alstria Office REIT AG

08/01/2021 09:25

** Societe Generale initiates coverage of office property
companies Alstria Office  AOXG.DE , Inmobiliaria Colonial
 COL.MC , Merlin Properties  MRL.MC , and Gecina with caution,
as the market suffers the impact of COVID-19
    ** It starts Germany's Alstria Office  AOXG.DE  with "sell"
as it shares management's concerns that the property market has
been overstimulated by a loose monetary policy and that COVID-19
has heightened risks
    ** The broker initiates Inmobiliaria Colonial  COL.MC  with
"sell" as well, asking why the Spanish group has not taken the
chance to benefit from wider diversification and scale as a
truly pan-European office consolidator
    ** "Its chosen sector focus of offices is sensitive to the
economic cycle and has been disrupted by the COVID-19 pandemic.
We are concerned that the sharp fall in office leasing in 2020
is likely to persist," it adds
    ** SocGen starts France's Gecina also with "sell", as it
expects that the shock to occupier demand due to COVID-19 could
persist and result in a shift towards tenant's market
    ** The broker initiates Spain's Merlin Properties with
"hold", saying the company is well positioned to ride country
risk out in Spain, which has been especially hard hit by the
pandemic

 ((kate.entringer@thomsonreuters.com))