Jefferies says European real estate risk shifts from debt to property valuations

Great Portland Estates

15/10/2026 10:20

** Jefferies says that higher-for-longer interest rates have shifted the main risk for European real estate companies from refinancing debt to further declines in property valuations
** Higher funding costs and wider assets value discounts are making acquisitions and other forms of external growth less attractive, increasing the importance of organic growth and capital allocation, it says
** Even so, the brokerage believes much of the pain is already reflected in share prices, creating selective opportunities for investors
** It upgrades Merlin Properties MRL.MC, Catena CATE.ST, Great Portland Estates GPEG.L and Target Healthcare REIT THRLT.L to "buy" from "hold", saying recent sell-offs have become overdone and now the stocks offer an attractive risk-reward profile
** Land Securities LAND.L and Derwent London DLN.L get upgraded to "hold" from "underperform" on reduced earnings downside risks, improved operating performance and discounted valuations
** It cuts Workspace WKP.L to "hold" from "buy", citing refinancing and execution risks, and Icade ICAD.PA to "underperform" from "hold" on weak earnings visibility and limited catalysts for a near-term recovery

COMPANY
NEW RATING
OLD RATING
NEW PT
OLD PT
Merlin Properties MRL.MC  
buy
hold
unchanged 
€16.00 
Catena CATE.ST
buy
hold
SEK416.00
SEK445.00
Great Portland Estates GPEG.L 
buy
hold
351.00p
334.00p
Target Healthcare REIT THRLT.L
buy
hold
124.00p
111.00p
Land Securities LAND.L
hold
underperform
593.00p
462.00p
Derwent London DLN.L 
hold
underperform
1,655.00p
1,713.00p
Workspace WKP.L 
hold
buy
367.00p
390.00p
Icade ICAD.PA 
underperform
hold
€12.00
€19.00

 (Reporting by Jagoda Darlak)