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Bernstein sees potential for underperformance reversal in European real estate

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** Bernstein chooses Covivio CVO.PA, Eurocommercial ECMPA.AS, LEG LEGn.DE, Gecina GFCP.PA and Vonovia VNAn.DE as its European real estate top picks, as the broker says these companies are exposed to sub-sectors inclined to deliver "sustainable long-term growth"

** Said sectors include industrial/logistics, German residential and prime offices, Bernstein says

** The broker rates the European companies as well as UK's British Land BLND.L and Segro SGRO.L "outperform"

** Bernstein highlights that the listed European real estate sector has slumped 23% since the war in Ukraine broke out in Feb. 2022, while the broader market was up 20%

** The broker sees the sector's good performance over the 3 months that followed monetary policy rate cut as a driver that could reverse the overall underperformance in the 12 months to come

** Bernstein adds that it expects "property values to bottom out in 2H24 across most sub-sectors"

** Aroundtown AT1.DE, Great Portland GPEG.L, VGP VGP1.BR as well as Klepierre LOIM.PA and Carmila CARM.PA are rated "underperform"

** STOXX 600 Real Estate index .SX86P has lost about 4.5% YTD

Reporting by Stéphanie Hamel


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