Barclays ups Klepierre as it turns more positive on retail real estate

Klepierre SA

13/04/2023 09:44

** Barclays double upgrades French mall owner Klepierre
 LOIM.PA  to "overweight" from "underweight" as it takes a
"constructive" view on European retail real estate despite
challenging consumer environment
    ** The broker says shopping centres are a "relatively
resilient asset class presenting the largest yield gap to
current estimated marginal financing rates"
    ** It adds online sales growth looks set to slow after rapid
expansion during the pandemic, as price-sensitive consumers tend
to switch between physical and online to find the best deals
    ** "We believe occupancy rates might be volatile this year,
as retailers navigate higher costs, but overall we expect them
to stabilise," the broker says regarding Klepierre
    ** Barclays prefers Klepierre given its high property yield
of 5.6% and superior debt metrics, while remaining cautious on
Unibail-Rodamco-Westfield  URW.AS  ("underweight")
    ** It flags URW's lower starting yields (5.4%), relatively
high leverage, no 2023 dividend payment and declining earnings
    

 (Pierre John Felcenloben)
 ((pierrejohn.felcenloben@thomsonreuters.com))