European real estate: DB eyes M&A comeback in 'challenging' 2021

Alstria Office REIT AG

22/01/2021 08:44

** Deutsche Bank says 2021 could be the "comeback year for
M&A" for European real estate firms, spurred by unprecedented
liquidity and wide net asset value (NAV) discounts
    ** However, it says 2021 will be challenging, citing the new
U.S. presidency, Brexit effects, upcoming German elections, and
continued COVID-19 impact
    ** "The Big Lockdown Recession is not a liquidity crisis,"
DB says, as it recommends investing in firms that have proven
they can sell at a premium to NAV
    ** Among its top picks, the brokerage upgrades Alstria
Office Reit  AOXG.DE , Icade  ICAD.PA , British Land  BLND.L ,
and Land Securities  LAND.L  to "buy" from "hold"
    ** In Germany, long-term investors are unlikely to worry
about the election while shorter-term focused ones may still
want to trade in the sector in 2021, DB notes
    ** The broker also expects the German High Court to decide
on the Berlin rent freeze by the spring, allowing landlords to
adjust rents back to previous levels
    ** As lockdowns and social distancing are likely to stay
until 2023 despite vaccine roll-out, the broker forecasts a
"U"-shaped recovery in the pan-European office market

 ((juliette.portala@thomsonreuters.com))