Investors rediscover appetite for Italian real estate stocks
11/03/2015 16:55
MILAN, March 11 (Reuters) - Italian real estate stocks such
as Prelios PCRE.MI and Risanamento RN.MI rallied on
Wednesday to test new highs as investors warm to improving
business prospects in a market battered by years of recession.
Chronically depressed property prices in Italy have started
to attract growing attention at a time when the weak euro and
very low interest rates are luring investors to Europe's shores.
"Italy is one of the countries in Europe that has not
benefited from the price rises we've seen in Germany and Spain,"
said Paolo Bellacosa, head of capital markets at CBRE real
estate consultancy in Italy.
"There's a lot of interest from foreign buyers, mainly U.S.
private equity funds."
Shares in Prelios rose 10 percent by 1530 GMT, while the
Risanamento share price was up more than 9 percent, bringing
gains since the start of the year to above 90 percent.
Elsewhere in the sector, Beni Stabili BNSI.MI and IGD
IGD.MI have risen 27 percent and 33 percent respectively so
far this year.
Europe's commercial property market sizzled last year as
demand for real estate in Paris, Britain and Germany, plus
strong private equity interest in Ireland and Spain, sent deals
to their highest level since the financial crisis.
But a protracted economic recession, along with red tape and
a byzantine legal system, meant that little of the money
flooding European markets came Italy's way.
Now pledges by Prime Minister Matteo Renzi to modernise the
country and kick-start growth are winning over converts as the
euro zone's third-largest economy shows signs of emerging from a
triple-dip recession that began in 2008.
Luca Dondi, head of real estate at independent think-tank
Nomisma, said that sentiment in the property market had been
lifted by recent positive house sales data, a rise in mortgages
from big banks and the recent spate of big deals.
In February Qatar's sovereign wealth fund struck a deal that
made it the sole owner of a prime real estate area in Milan
worth more than 2 billion euros ($2.12 billion). ID:nL5N0W13BO
"The past seven years have been very difficult for the
market and many of the stocks are valued cheaply compared with
their assets. They're now returning to more normal levels,"
Dondi said.
($1 = 0.9456 euros)
(Reporting by Danilo Masoni and Stephen Jewkes; Editing by
David Goodman)
((stephen.jewkes@thomsonreuters.com; +39.0266129695; Reuters
Messaging: stephen.jewkes.thomsonreuters.com@reuters.net))
Keywords: ITALY REALESTATE/SHARES