Deutsche Bank still prefers commercial European real estate

VGP NV

01/12/2025 09:04

** Deutsche Bank confirms its preference for commercial over residential real estate in Europe, supported by expected economic recovery next year and higher long-term interest rate expectations

** It prefers logistics among sub-sectors, citing strong earnings growth and still-moderate valuation levels

** It upgrades logistics and industrial properties companies Montea MONTE.BR and VGP VGP1.BR to "buy" from "hold"

** "We remain generally cautious on residential," it says, citing sluggish earnings growth, high leverage and low rental yields

** However, it ups residential property group LEG Immobilien LEGn.DE to "buy" from "hold" on "very attractive valuation levels" after a significant underperformance, stronger rent growth momentum, de-leveraging and NTA growth potential

** The broker expects the retail sector to continue to recover thanks to solid operational performance and a further pick-up of property values, while the office sector appears to be bottoming out, it says

** Shares in Montea are up 2%

(Reporting by Linda Pasquini)

((Linda.pasquini@thomsonreuters.com))