Relative advantage of European listed RE as an investment opportunity
Recent UBS report unveils the relative advantage of European listed real estate sector as an investment opportunity -a fact that the CEO of EPRA had pointed out earlier this year, in his opening remarks during the RED Meeting Point. The analysis unveils some remarkable figures with the upward potential for certain real estate stocks at 40%.
According to the UBS report - and based on closing prices as of November 10 - it is estimated that the sector will trade at prices 17 times higher than the annual earnings per share of the listed companies (2023E, P /E), all through 2023.
The figure seems quite encouraging for the sector, in terms of growth prospects and investors' expectations. The bank estimates that the dividends paid to shareholders for the same period are expected to grow 4.4% (2023E DPS yield), while the bank expects income per share to grow by 4.7% for the years 2023-2024 ( 2023-24 EPS growth).
Capitalization of c.150 billion
The total capitalization of central European listed real estate amounts to $103.805 billion, while the equivalent of German and French listed RE entities reaches at $30.460 billion and $24.934 billion respectively.
Classified according to real estate subsector weighing in their portfolios, REITs investing in residential units have the highest recorded capitalization of $357 billion. At the same time residential listed real estate is trading with the largest discount observed of 45%.
REITs with diversified investments had a capitalization that reached $292 billion as of November 10, and the REITs investing in industrial real estate assets reached a total of $202 billion.
It is also remarkable that European listed real estate firms have a net debt to total assets ratio of 31%. A sign that they carry a relatively low amount of debt and therefore considered to be a modestly leveraged industry worldwide.