(Reuters) – The European real estate sector should benefit in 2024 from the expected drop in interest rates from major central banks, the return of employees to the office and a more favorable environment for mergers and acquisitions, estimates JPMorgan.
The European real estate index has gained 8.13% since the start of the year after a fall of 40.12% in 2022, compared to a gain of 11.58% for the Stoxx 600%.
“Data on the use of public transport in London and Paris reflect announcements of a compulsory return to the office,” writes the American investment bank, estimating that stocks like Derwent London and Gecina should benefit from this change of direction. tendency.
JPMorgan also sees a “positive surprise” in the growth of industrial capital in the United Kingdom, which should notably support the British property company Segro, which specializes in warehouses and industrial sites.
The US investment bank also notes the emergence of positive signs in the German residential sector, while mergers and acquisitions are back on the agenda as the cost of debt falls.
JPMorgan, however, warns about stocks linked to shopping centers such as URW and Klépierre, estimating that price deflation in food and clothing, without an increase in volumes, could increase pressure on real estate companies of this type.
The American bank also considers the valuations of companies like Castellum in Sweden and WDP in Belgium to be tense, while it lowered its recommendation on VGP from “neutral” to “underweight” expecting a decline in the stock.
(Written by Olivier Sorgho; Claude Chendjou, edited by Kate Entringer)
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