SocGen prefers Unibail over Klepierre as it sees gains from U.S. exit

Klepierre SA

15/03/2022 12:17

** Societe Generale raises shopping mall owner
Unibail-Rodamco-Westfield  URW.AS  to "buy" from "sell" while
keeping rival Klepierre  LOIM.PA  at "sell", saying the wider
discount in Unibail's share price poses an attractive
opportunity
    ** "Klepierre's shares have outperformed URW's despite
incrementally positive comments from URW's management relating
to its planned US exit," the broker says, pointing to a "rare
period" of share outperformance by retail REITs since before
Christmas
    ** SocGen says it believes the sale of Unibail's U.S.
properties will be executed at a tighter discount to book value
than implied in the current share price
    ** It also sees potential capital returns from the U.S.
disposals and dividend reinstatement for fiscal 2023
    ** The broker expects Unibail to return to operational
outperformance, especially in the major cities it is invested in
    ** SocGen sees an 11% decrease in Klepierre's 2023 recurring
earnings, compared with 9% rise it estimates for Unibail
    ** "Neither REIT is invested in Russia or Ukraine," the
broker notes, adding the displacement of more than two million
people could also generate increased demand

 (Reporting by Augustin Turpin)
 ((augustin.turpin@thomsonreuters.com))