MS turns more positive on property sector, prefers UK over continental Europe

Unibail-Rodamco-Westfield SE

02/09/2024 09:36

** Morgan Stanley expects European property firms to face
better times soon and raises its industry view to "attractive"
as further rate cuts, lower long-term rates and stabilising
asset values provide a compelling backdrop
    ** After a "lost decade" for the British real estate, "stars
are aligning" as confidence is returning, balance sheets are
healthy and assets have been marked down, MS says
    ** It sees a likely slower recovery in continental Europe
where high leverage leaves less room for value creation
    ** Its top picks are British Land  BLND.L  and Segro
 SGRO.L ; it removes Unibail  URW.PA  from the top pick list
    ** MS raises Spain's Colonial  COL.MC  to "equal-weight"
from "underweight" saying the shares screen fairly valued for
its return profile
    ** It cuts Switzerland's PSP  PSPN.S  to "underweight" from
"equal-weight" and says it does not consider it a "great stock"
due to its defensive characteristics
    ** MS warns that a broader recession would likely accelerate
rate cuts but affect demand, driving certain sub-sectors such as
German residential to outperform more demand-sensitive peers

 (Reporting by Matteo Allievi)
 ((Matteo.allievi@thomsonreuters.com))