Bernstein sees potential for underperformance reversal in European real estate

Klepierre SA

03/05/2024 10:10

** Bernstein chooses Covivio  CVO.PA , Eurocommercial
 ECMPA.AS , LEG  LEGn.DE , Gecina  GFCP.PA  and Vonovia
 VNAn.DE  as its European real estate top picks, as the broker
says these companies are exposed to sub-sectors inclined to
deliver "sustainable long-term growth"
    ** Said sectors include industrial/logistics, German
residential and prime offices, Bernstein says
    ** The broker rates the European companies as well as UK's
British Land  BLND.L  and Segro  SGRO.L  "outperform"
    ** Bernstein highlights that the listed European real estate
sector has slumped 23% since the war in Ukraine broke out in
Feb. 2022, while the broader market was up 20%
    ** The broker sees the sector's good performance over the 3
months that followed monetary policy rate cut as a driver that
could reverse the overall underperformance in the 12 months to
come
    ** Bernstein adds that it expects "property values to bottom
out in 2H24 across most sub-sectors"
    ** Aroundtown  AT1.DE , Great Portland  GPEG.L , VGP
 VGP1.BR  as well as Klepierre  LOIM.PA  and Carmila  CARM.PA 
are rated "underperform"
    ** STOXX 600 Real Estate index  .SX86P  has lost about 4.5%
YTD
    

 (Reporting by Stéphanie Hamel)
 ((stephanie.hamel@thomsonreuters.com))