European real estate stocks bounce at end of troubled month (updated)

Wallenstam AB

30/03/2023 09:50

(Adds details, investor comment)
    By Danilo Masoni
       MILAN, March 30 (Reuters) - Real estate stocks were the
top performers in Europe on Thursday morning as immediate
concerns over prospects for the highly leveraged sector eased
after a heavy drop in March that dragged it close to 10-year
lows hit last year.
    Investors though remained wary of more pain ahead for the
industry with property prices looking set to fall further as the
economy weakens, while tighter credit conditions make it harder
for some companies to refinance debt.  
    "At these levels, a bit of bad news is in the prices.
Nevertheless, I believe prospects for real estate remain ugly,"
said Giuseppe Sersale, fund manager at Anthilia in Milan. "I
remain in the camp of those seeing a recession coming."    
    Sweden's Castellum   CAST.ST , SBB  .SBBb.ST , Wallenstam
 WALLb.ST , Aroundtown  AT1.DE  and Vonovia  VNAn.DE  in Germany
and Dutch-listed Unibail-Rodamco  URW.AS  led real estate stock
gainers, up more than 4%. 
    Some of these companies are highly shorted by investors
seeking to make gains from a fall in their share prices. 
    The STOXX Europe Real Estate index  .SX86P  was up 2.8% by
0843 GMT, leading sectoral gainers in the region, although it
was still down more than 13 % so far in March. The broader STOXX
600  .STOXX  equity benchmark index was up 0.9% on the day.
    Citi warned this week the potential downside for real estate
stocks in Europe could exceed 50%, should the market test 2009
trough price-to-earnings valuations. Analyst also see bigger
risks that real estate companies in continental Europe may have
to tap shareholders to beef up their finances. 

 (Reporting by Danilo Masoni; Editing by Amanda Cooper)
 ((Danilo.Masoni@TR.com; +39-02-66129734; Reuters Messaging:
danilo.masoni.thomsonreuters.com@reuters.net; On Twitter https://twitter.com/damasoni))