European property sector less exposed to current risks than others, MS says

SEGRO

16/03/2026 07:50

** Morgan Stanley upgrades European property companies "playing offence", as it turns more constructive on warehousing and data centres; cautious on storage, and underweight on offices

** MS argues that in comparison to other equity sectors, current risks for European property companies are less impactful to earnings, but warns that the situation is fluid

** "If we were indeed to see a major inflation shock driving sustained higher long-term rates combined with a recessionary backdrop, we do not think this sector would offer a place to hide," MS says

** It upgrades Merlin Properties MRL.MC and Segro  SGRO.L to "overweight", citing the former's growth potential in data centres and the latter's improving fundamental backdrop

** It also raises Hammerson HMSO.L to "overweight", as it sees scope for its organic growth to be boosted by external growth

** On the other hand, it downgrades Big Yellow BYG.L and LondonMetric LMPL.L to "underweight", as it becomes "even more cautious" on storage and "rate sensitive-names"

COMPANY
RATING
OLD RATING
PT
OLD PT
Big Yellow
underweight
equal-weight
1,000p
1,150p
Hammerson
overweight
equal-weight
400p
350p
LondonMetric
underweight
equal-weight
205p
215p
Merlin
overweight
equal-weight
16.5 euros
14 euros
Segro
overweight
equal-weight
880p
790p

 (Reporting by Javi West Larrañaga)

 ((javier.west@thomsonreuters.com; +34 918 35 61 12))