Party is over - Stifel cuts German real estate as recession looms

LEG Immobilien SE

05/07/2023 08:30

** Stifel expects German real estate companies to enter a
recession phase, hit by growing interest costs following a
decade of limited earnings growth amid debt refinancing
processes
    ** After a seemingly endless party of growth fuelled by ever
cheaper finance, the sector will now face a "protracted
hangover" with higher rates that are more than likely not
transitory, the broker says
    ** "We think this means that unless there is a
recapitalisation or a substantial decline in financing costs,
share prices will continue pricing in significant risks to asset
values," it adds
    ** Stifel cuts TAG Immobilien  TEGG.DE , LEG Immobilien
 LEGn.DE  and Vonovia  VNAn.DE  to "sell" from "hold"
    ** The stocks are down 2%-4% in the morning trade

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