European real estate: BofA's "cautiously optimistic" on market sentiment change

Eurocommercial Properties NV

18/01/2021 15:57

** BofA Global Research says it is "cautiously optimistic"
for European real estates, seeing investments in 2021 to be
driven by dismissal of a new surge in COVID-19 cases, fiscal
tightening, a change in market sentiment as earnings are seen to
recover in 2022
    ** Ample liquidity and negative rates whet appetite for
positive yield and support property values, BofA adds, even
though real estate earnings are more likely to rebound closer to
the end of the economic recovery
    ** "Investors' confidence in a vaccine-induced return to
normality should lead the market to look through the near-term
macro weakness and go straight to the pricing of a complete
recovery scenario", the broker says
    ** The broker double-upgrades Merlin Properties  MRL.MC  to
"buy", raises Gecina  GFCP.PA , Hammerson  HMSO.L , Shurgard
Self Storage  SHUR.BR  and Land Securities  LAND.L  to "buy",
Great Portland Estates  GPOR.L  to "neutral"
    ** Yet, with rental value decline in European portfolios
ahead, BofA cuts "retail-focused" Klepierre  LOIM.PA  to
"underperform", keeps Unibail-Rodamco-Westfield  UNBP.AS ,
Carmila  CARM.PA  and Eurocommercial Properties  SIPFc.AS  at
"underperform"    


 ((juliette.portala@thomsonreuters.com))