'End of a golden era' for European logistics assets - Jefferies

Sagax AB

04/09/2024 08:55

** Jefferies says the "golden era" of the European logistics
property assets is over, marked by rising vacancies and slowing
rental growth, as it upgrades one stock and initiates three more
    ** "The market appears to be cooling as tenants are
rationalizing their spaces," it says
    ** European square meters more than doubled in less than 10
years, 15% of the growth driven by e-commerce and the rest by
increasing retail sales and industrial production, it says
    ** However, average sales and production per square meter
have fallen by nearly a half over the past 10 years, it adds
    ** Jefferies' top picks are CTP  CTPNV.AS , which it says is
less affected by declining retail sales, and Argan  ARGAN.PA 
which it upgrades to "buy" on lower leverage risk and cheap
valuation
    ** It initiates Catena  CATE.ST  and Sagax  SAGAa.ST  with
"underperform" based on expensive valuations and the rapid
deterioration of the Swedish market; it starts Swedish Logistic
Property  SLPb.ST  with "hold"
    
 COMPANY           RATING               PT
 CTP               "buy" (unchanged)    EUR 20 (from EUR 18)
 Argan             "buy" (from "hold")  EUR 90 (from EUR 78)
 Catena            "underperform"       SEK 460
 Sagax             "underperform"       SEK 170 
 Swedish Logistic  "hold"               SEK 37
 Property                               
 
 (Reporting by Mathias de Rozario)
 ((mathias.derozario@thomsonreuters.com))