UBS sees solid rental growth, positive catalysts for German real estate

Grand City Properties SA

26/01/2022 14:21

** UBS says it finds the German residential sector
"attractively-priced" in a pan-European real estate context,
with positive catalysts ahead in 2022
    ** "Our base case remains of further yield compression and
solid rental growth in 2022," the broker says
    ** It notes the sector is down 18% over 12 months "mostly on
concerns of rising interest rates", even though the broker sees
"no immediate impact" from the rates to NAVs or funds from
operations (FFO)
    ** It forecasts an average 32% 12-month total return across
the sector
    ** The brokerage prefers Germany's Vonovia SE  VNAn.DE 
given its recently-completed capital raise and positive upcoming
catalysts
    ** It cuts Adler Group SA  ADJ.DE  to "neutral" from "buy",
saying the company's deleveraging has progressed but will come
with a major cash flow impact
    ** UBS maintains "buy" rating for Grand City Properties SA
 GYC.DE  and LEG Immobilien SE  LEGn.DE 

 (Reporting by Anastasiia Kozlova)
 ((Anastasiia.Kozlova@thomsonreuters.com))