JP Morgan assesses European Property
JP Morgan believes the bullish property market is entering a new phase which has led it to raise its target prices on the European Property sector by 19%.
The current stream of capital into property shows no signs of stopping, with certain analysts estimating a record global investment volume of $600bn in this year.
New developments in the sector are expected to expand the bull market, such as the introduction of real estate investment trusts, M&A activity, the globalization of capital and no clear downside trigger.
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However, every wave eventually breaks, said the broker, who believes that property valuations factor in a lot of good news, such as good rental growth prospects, low interest rates, modest risk and debt premiums and favourable tax legislation.
As a result, "the margin for error is nil in a world where the economic outlook seems to change by the day."
Its preferred companies in the European Property market are British Land, Land Securities, IVG and Beni Stabili, all listed as 'overweight'.
