Swedish offices vulnerable in European real estate, says Jefferies
06/09/2024 09:09
** Jefferies sees better protection in European real estate
outside of Swedish offices as the local market pattern adds
headwinds to earnings growth
** Says lease contracts are much shorter in Sweden (3 years)
than in other European countries (5 in Spain, 9-10 in France,
Germany) making rents more vulnerable in an economic downturn
** Notes that shorter leases also increase the risk of
higher vacancy, with Castellum CAST.ST and Fabege FABG.ST
recording HI vacancy rates at +150bp and +100bp, respectively
** Jefferies starts Castellum with "underperform" and Fabege
with "hold", estimating an EPRA EPS CAGR of -0.7% and -3.1%,
respectively, over 2023-26
** Starts Cibus CIBUS.ST with "hold", expecting flattish
EPRA EPS in next 3 years on higher financial expenses, 2023
capital increase
** Upgrades Colonial COL.MC to "buy", citing "sustainable
strong operations and lower leverage"
(Reporting by Matteo Allievi)
((Matteo.allievi@thomsonreuters.com))