Live Markets: Is the tide turning for European real estate?

VGP NV

05/09/2024 16:54

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    IS THE TIDE TURNING FOR EUROPEAN REAL ESTATE?
    After high interest rates for longer brought down the
European real estate sector, J.P.Morgan analysts believe that as
the price of money goes down, transactions will likely rise
again. 
    Confident management messaging at recent results that values
were stabilizing across Europe was received with some skepticism
from investors, these analysts said, but in the second half of
the year they see room both for a return of transactions and
growth in property values.
    "Since June 2024, debt costs have come down, central banks
have started to cut rates and more is expected here", they added
in a note.
    This week's European investment property data, tracking
valuation points in cities from Amsterdam to Warsaw and from
offices to hotels, showed that 48% posted capital growth in Q2,
compared to 23% in Q1, JPM said.
    Its top picks include France's Gecina  GFCP.PA  due to its
"robust" prime Paris office portfolio and Spain's Merlin
Properties  MRL.MC  as the 1.0 billion euro capital raise was
"the catalyst to unlock significant value". 
    The broker would avoid Sweden's Castellum  CAST.ST , citing
its refinancing risks, and Belgium's VGP  VGP1.BR  as it sees
better value in its logistics peers. 
    
    (Matteo Allievi)
    *****

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