REIT SECTOR REPORT: IN PRICE DISCOVERY MODE (ANÁLISIS BANCO SABADELL)
In price discovery mode. LRE, COL and MRL BUY. MRL is our top pick.We update our target prices to reflect the deterioration of the investment market following the sharp rise in interest rates along with the economic downturn. The stock market could be assuming a -29% drop in GAV, which is greater than what we see as sufficiently pessimistic (-20% in 2022-24), whereas we believe they are well protected in the short term against rate hikes (in cashflows and refis), hence our positive view, although the situation will be uncertain in the short term. We cut our T.P. for LRE by -6% to € 6.38/sh. (+35% upside), MRL -17% to € 10.75/sh. (+20% upside) and raise that of COL by +7% to € 7.85/sh. (+20% upside).
Lar Espana Real Estate SOCIMI SA is a Spain-based company primarily engaged in the operation of retail Real Estate Investment Trusts (REITs). The Company specializes in acquiring, managing and renting real estate assets within the Spanish market. Its business activities are divided into three segments: Shopping Centers, Offices, as well as Logistics. The Shopping Centers area is responsible for operation of a number of shopping malls, namely Txingudi, Las Huertas, Albacenter, Anec Blau, Hiper Albacenter, and Nuevo Alisal, among others. The Offices segment invests in office properties, such as Arturo Soria, Cardenal Marcelo Spinola, Egeo and Eloy Gonzalo. The Logistics division focuses on managing logistics warehouses, including Alovera I and Alovera II. The Company also owns a plot for residential properties development. It is a parent of a number of entities, such as Lar Espana Inversion Logistica SA, Gran Via Centrum Holdings SAU, Global Noctua and Puerta Maritima Ondara.
Merlin Properties SOCIMI SA is a Spain-based company engaged in the operation of a real estate investment trust (REIT). The Company focuses on the acquisition, management and rental of commercial properties located in the Iberian Peninsula, primarily in Spain. The Company's activities are divided into the following segments: Office buildings, operating a portfolio of office space; High-street retail, engaged in leasing retail stores; Shopping centers, engaged in managing department stores; Logistics, operating logistics warehouses and distribution centers, and Others. The Company's other activities include property management services rendered to third parties.
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