Real Estate: REITs, best option among traded companies; Merlin Properties main recommendation
Bankinter | At this point of the cycle is it more attractive to invert in real estate through traded companies than real estate assets.
real estate sector
Office rents in Madrid are yet to reach previous peak levels
The capital of Spain is one of the most cyclical markets in Europe and rents are still far from the previous peaks. According to Morgan Stanley, there is more upward potential in values with exposure to offices in Madrid. Besides, Spain is expected to grow above the European average.
More sustainable growth in Spanish housing market: prices will rise c.5% in 2019-20
Caixabank Research | The Spanish housing sector is entering a more mature phase in the cycle, characterised by a weakening in growth in demand and prices. The factors which support the expansion of the housing market (creation of employment, favourable financial conditions and elevated external demand) continue evolving positively but are losing dynamism.
Real estate sector: Monetary policy and bond IRR could boost investment flows
Morgan Stanley | As we indicated in our last real estate strategy report, this has been the worst sector in Europe in 2Q19 (oversold and with a relative performance of 3.5sd below its 12MA). This has been mainly motivated by concerns about the proposal to freeze rental prices in the city of Berlin (and its possible spread to other cities in the country) as well as the uncertainty regarding Brexit.
Spain will continue to grow at rates close to 2% in 2019-20 thanks to internal demand
Banc Sabadell | The Spanish economy faces the second half of 2019 growing at relatively high rates (we expect 2.3% yoy in 2019 vs 1.0% for the Eurozone) but with a less favourable composition of growth.
More mortgages in Spain, but smaller
BancaMarch | The amount of mortgages conceded in March rose +23.2% yoy, which implies a slowdown compared to the +31.2% registered in February.
Small & Mid Caps: Neinor Homes, Hitting bottom
Sabadell | Neinor 8 April´s profit warning was undoubtedly a bucket of cold water, not just because it was unexpected (the consensus expected a lowering of targets), but also because of the scale of the cut (-50% of the Ebitda accumulated in 2019 and 2020). In this note we downgrade our objective price 13% to 13.86 euros/share because of the delay in the delivery plan and because of more conservative profitability hypotheses in the long term. Despite the cut in our O.P. we continue to see value in the share and maintain or recommendation of BUY.
Merlin could create a Socimi in Portugal or list on the Lisbon stock market
Bankinter | The company announced in its shareholders´ general assembly yesterday that it would be considering creating a Socimi in Portigal that would be consituted before the end of the year.
Is there a bubble in Spain’s rental market?
House sales in Spain: First Slowdown in Three Years
Bankinter | The sale of houses in Spain fell in January (-0.2% yoy). It is the first drop in the last 11 months and shows a slowdown (from +3.8% in December, +2.8% in November, +15% in October). It is the third time in three years the rate has been negative.