European Listed Real Estate
Monthly Review – February 2020 CORPORATE & INVESTMENT BANKING Market Conditions (1/3)
French Real Estate Trends
The expected total Investment in Standard Commercial Real Estate (€bn) Evolution of Indexation rates investment in 2019 has reached over €35bn, an Expected > €35bn +5.0% increase of 16% 35 compared to 2018. 30 +3.0% Despite a slow start of the 25 year, the trend that began +1.0% in H1 continued over the 20 Summer with several 15 -1.0% major deals (40% superior to €200m). 10 -3.0% 5 The real estate premium 0 -5.0%
is increasing on the back
2001 2002 2003 2004 2005 2006 2010 2011 2012 2013 2014 2015 2017 2018 2019 2008 2016
of a OAT 10Y rate ever so 2007
Q4 09 Q4 10 Q3 12 Q1 12 Q4 13 Q3 14 Q2 15 Q1 15 Q4 16 Q3 17 Q2 18 Q4 19 Q3 Q2 11 Q2 18 Q1 low, while prime offices Q1 Q2 Q3 Q4 ICC ILC ILAT yields are steady Comparative Change in Rates Prime Yields as of September 2019
7.0% 350 bps Assets Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Trend 6.0% 300 bps Paris CBD 3.05% 3.05% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 5.0% 250 bps La Défense 4.25% 4.10% 3.90% 4.10% 4.10% 4.00% 4.00% 4.00% 4.00% 200 bps 4.0% Inner Rim 4.05% 4.05% 3.80% 3.80% 3.80% 3.80% 3.80% 3.80% 3.80% 150 bps 3.0% Aix/Marseille 5.75% 5.20% 4.70% 4.70% 4.70% 4.70% 4.70% 4.70% 4.70% 100 bps 2.0% Lyon 3.95% 3.90% 3.90% 3.90% 3.90% 3.85% 3.85% 3.85% 3.70% 50 bps Grade A Warehouses 1.0% 0 bps 5.25% 4.90% 4.90% 4.75% 4.75% 4.75% 4.50% 4.50% 4.20% - Greater Paris 0.0% -50 bps Industrial premises 5.90% 5.90% 5.90% 5.60% 5.60% 5.40% 5.60% 5.60% 5.60%
-1.0% -100 bps - Greater Paris
2002 2003 2004 2005 2006 2011 2012 2013 2014 2015 2016 2007 2008 2009 2010 2017 2018 2019 2001 Street-level shops - Paris 2.75% 2.75% 2.75% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% Shopping centers - France 4.20% 4.20% 4.20% 4.20% 4.20% 4.20% 4.50% 4.75% 4.75% Real Estate premium Prime offices Paris OAT 10Y Euribor 3M Sources: CBRE, Immostat, Banque de France, INSEE
2 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
C2 - Internal Natixis Market Conditions (2/3)
€291m Volumes in the Real Estate Sector in January
MAIN DEALS OF THE MONTH 4 ABBs representing €291m ECM volumes in the European Real Estate ABB sector last month Issuer Country Date Type Amount (€ m) % of capital # of trading days Discount K2A Knaust & Andesson Fastigheter AB 14-Jan-20 Capital Increase 17 8.3% 89 1.3% It represents a significant S Immo AG 15-Jan-20 Capital Increase 149 10.0% 87 0.0% 30% decrease compared Deutsche Konsum REIT-AG 20-Jan-20 Capital Increase 16 3.1% 83 -4.3% to December, attributable DIC Asset 21-Jan-20 Capital Increase 110 9.5% 22 -3.0% to the end of the year traditional slowdown
Intu Properties could seek PERFORMANCE OF MAIN IPOS PRICED SINCE 2015 to raise $£1bn to shore up its finances Company Country Date Amount (€m) Perf Company Country Date Amount (€m) Perf Pandox 18-Jun-15 593 +100.9 % Aberdeen Standard 20-Nov-17 214 -8.2 % Schroder 11-Dec-15 145 +12.5 % Metrovacesa 2-Feb-18 646 -44.1 % Coima 13-May-16 215 -10.4 % Instone Real Estate 13-Feb-18 390 +11.6 % Civitas Social Housing 21-Nov-16 408 -2.7 % Godewind Immobilien 9-Mar-18 375 +31.8 % Varia US Properties 8-Dec-16 100 +23.7 % Kojamo 14-Jun-18 483 +96.0 % Carmila 6-Jul-17 629 -24.9 % Arima 18-Oct-18 100 +17.0 % Aedas Homes 18-Oct-17 667 -33.3 % Gateway Real Estate 9-Apr-19 172 +7.5 % VGP 25-Oct-17 253 +58.9 % John Mattson 22-May-19 121 +52.7 %
3 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
C2 - Internal Natixis Market Conditions (3/3)
Real Estate vs. Blue Chips Indices and Sectors
Strong set of positive Blue Chips Indices Performance performance among the Blue Chips Indices, 150 especially with EPRA Stock performance France which has 140 1 M 6 M 12 M outperformed the sector EPRA France +1% +17% +31% with a +31% increase over 130 EPRA Europe +1% +16% +17% the past year 120 CAC 40 -1% +6% +20% 110 DAX +1% +7% +18% Regarding sector indices, 100 FTSE 100 -1% -1% +10% the performance is Euro Stoxx 50 -1% +6% +18% generally positive with a 90 few setbacks for the Oil & S&P 500 +2% +8% +23% 80 Gas and Telecom sectors. 06/01/17 06/08/17 06/03/18 06/10/18 06/05/19 06/12/19 The largest performance EPRA France EPRA Europe CAC 40 DAX has been recorded in the FTSE 100 Euro Stoxx 50 S&P 500 financial, Real Estate and Utilities sectors over the DJ Stoxx Indices Performance past twelve months.
150 Stock performance 140 1 M 6 M 12 M 130 EPRA France +1% +17% +31% 120 EPRA Europe +1% +16% +17% 110 Consumer +1% +2% +21% 100 Utilities +8% +19% +28% 90 Financial +2% +16% +30% 80 Industrials +1% +10% +23% 70 06/01/17 06/08/17 06/03/18 06/10/18 06/05/19 06/12/19 Oil & Gas -3% -5% -3% EPRA Europe EPRA France Consumer Utilities Financial Telecom +2% +4% +4%
Industrials Oil & Gas Telecom Real Estate
Source: Bloomberg
4 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
C2 - Internal Natixis Performance of Real Estate Stocks (1/4)
French Large & Mid Cap
Large Caps – Stock Performance since January 2017
380 Stock performance Capi. Float Vol.* Float rotation 330 1 M 6 M 12 M (€ m) (%) (€ m) (trading days)
280 Altarea +3% +14% +25% 3,482 18% 0.5 1,327 Argan +2% +25% +62% 1,764 41% 0.3 2,471 230 Carmila -7% +16% +16% 2,450 23% 2.2 676 Covivio Hotels +2% +13% +21% 3,571 6% 0.1 2,710 180 Covivio +5% +14% +28% 9,350 44% 10.9 377 Gecina +5% +22% +44% 13,036 54% 16.9 413 130 Icade +2% +26% +45% 7,454 42% 7.0 448 80 Klépierre -7% +10% +17% 9,591 60% 23.4 247 IPO Mercialys -5% +14% -2% 1,065 50% 2.3 234 30 SFL +6% +14% +28% 3,657 6% 0.1 3,050 06/01/17 06/08/17 06/03/18 06/10/18 06/05/19 06/12/19 Unibail Rodamco -10% +2% -10% 17,450 100% 61.4 283 EPRA France Altarea Argan Carmila Covivio Hotels Covivio Gecina Icade
Mid Caps – Stock Performance since January 2017
210 Stock performance Capi. Float Vol.* Float rotation 190 1 M 6 M 12 M (€ m) (%) (€ m) (trading days) 170 Cegereal -0% +10% +27% 684 2% 0.0 1,033 150 Frey +5% +10% +37% 845 8% 0.0 4,103 130 Immo. Dassault +15% +23% +44% 525 14% 0.0 2,339 Inéa +2% -0% +16% 348 16% 0.1 786 110 Patr. & Comm. +13% +22% +42% 296 24% 0.1 713 90 Selectirente +0% +10% +7% 380 16% 0.0 2,936 70 Tour Eiffel +1% +7% +10% 650 7% 0.1 536
50
30 06/01/17 06/08/17 06/03/18 06/10/18 06/05/19 06/12/19 EPRA France Cegereal Frey Immo. Dassault Inéa Patr. & Comm. Selectirente Tour Eiffel Source: Bloomberg * 3-month average daily volumes
5 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
C2 - Internal Natixis Performance of Real Estate Stocks (2/4)
European Retail & Offices players
− Retail – Stock Performance since January 2017
Stock performance Capi. Float Vol.* Float rotation 150 1 M 6 M 12 M (€ m) (%) (€ m) (trading days) Altarea +3% +14% +25% 3,482 18% 0.5 1,327 Carmila -7% +16% +16% 2,450 61% 2.2 676 100 Citycon +4% +9% +17% 1,716 76% 0.9 1,454 Deutsche Euro -6% -0% -0% 1,533 75% 3.6 319 Eurocommercial -9% +6% -12% 1,136 87% 2.5 400 Hammerson -18% -0% -21% 2,294 68% 9.1 171 50 IPO Intu -44% -75% -83% 298 58% 1.7 103 Klépierre -7% +10% +17% 9,591 60% 23.4 247 Mercialys -5% +14% -2% 1,065 50% 2.3 234 0 Retail Estates +0% +3% +17% 1,043 78% 0.8 1,048 06/01/17 06/08/17 06/03/18 06/10/18 06/05/19 06/12/19 Shaftesbury -0% +14% +11% 3,280 45% 3.9 377 Altarea Carmila Citycon Deutsche Euro Eurocommercial Hammerson Intu Klépierre Unibail Rodamco -10% +2% -10% 17,450 100% 61.4 283 Mercialys Retail Estates Shaftesbury Unibail Rodamco Wereldhave -14% -10% -33% 697 100% 3.8 183
− Offices – Stock Performance since January 2017
280 Stock performance Capi. Float Vol.* Float rotation
230 1 M 6 M 12 M (€ m) (%) (€ m) (trading days) Alstria +4% +20% +40% 3,131 95% 7.3 408 180 Befimmo +2% +12% +17% 1,565 66% 1.5 674 Colonial +6% +18% +38% 6,138 33% 6.7 306 130 Derwent London +2% +35% +35% 5,426 80% 11.8 368 Fabege +4% +9% +26% 5,174 55% 10.3 277 80 Gecina +5% +22% +44% 13,036 54% 16.9 413 Great Portland Estates +8% +36% +30% 2,778 90% 10.0 249 30 PSP +7% +20% +47% 6,089 73% 15.8 280 06/01/17 06/08/17 06/03/18 06/10/18 06/05/19 06/12/19 SFL +6% +14% +28% 3,657 6% 0.1 3,050 Alstria Befimmo Colonial Derwent London Fabege Gecina
Source: Bloomberg * 3-month average daily volumes
6 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
C2 - Internal Natixis Performance of Real Estate Stocks (3/4)
European Residential & Diversified
− Residential – Stock Performance since January 2017
240 Stock performance Capi. Float Vol.* Float rotation 220 1 M 6 M 12 M (€ m) (%) (€ m) (trading days) 200 ADO -11% -26% -43% 1,268 63% 4.0 201 180 Adler -9% -0% -11% 884 61% 2.4 229 160 Deutsche Wohnen +4% +15% -10% 13,842 70% 29.3 332 140 Grand City +7% +11% +14% 3,885 55% 4.1 527
120 LEG +5% +5% +14% 7,698 70% 16.6 323 TAG +6% +11% +12% 3,466 97% 7.8 429 100 Vonovia +6% +15% +21% 27,960 73% 57.8 351 80
60 06/01/17 06/08/17 06/03/18 06/10/18 06/05/19 06/12/19 ADO Adler Deutsche Wohnen Grand City LEG TAG Vonovia
− Diversified – Stock Performance since January 2017
230 Stock performance Capi. Float Vol.* Float rotation 210 1 M 6 M 12 M (€ m) (%) (€ m) (trading days) 190 Aroundtown +3% +14% +13% 10,205 35% 23.6 150 170 British Land -8% +11% +7% 6,304 84% 22.9 232 150 Castellum +6% +23% +46% 6,182 65% 11.0 367 130 Cofinimmo +7% +17% +28% 3,789 95% 4.6 778
110 Covivio +5% +14% +28% 9,350 44% 10.9 377 Hufvudstaden +1% +11% +30% 7,247 29% 4.7 439 90 Icade +2% +26% +45% 7,454 42% 7.0 448 70 Land Sec. -3% +17% +19% 8,423 82% 23.2 298 50 Merlin +1% +5% +15% 6,121 62% 12.3 309 06/01/17 06/08/17 06/03/18 06/10/18 06/05/19 06/12/19 Swiss Prime +4% +32% +46% 8,241 88% 21.6 336 Aroundtown British Land Castellum Cofinimmo Covivio Hufvudstaden Icade Land Sec. TLG +4% +10% +16% 3,368 60% 8.4 241 Merlin Swiss Prime TLG Source: Bloomberg * 3-month average daily volumes
7 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
C2 - Internal Natixis Performance of Real Estate Stocks (4/4)
Alternative Assets
− Logistics – Stock Performance since January 2017 − Hotels – Stock Performance since January 2017
400 180a 350 160 300
250 140
200 120 150 100 100 80 50 06/01/17 06/08/17 06/03/18 06/10/18 06/05/19 06/12/19 06/01/17 06/08/17 06/03/18 06/10/18 06/05/19 06/12/19 WDP Argan Segro Covivio Hotels Pandox Stock performance Capi. Float Vol.* Float rotation 1 M 6 M 12 M (€ m) (%) (€ m) (trading days) Stock performance Capi. Float Vol.* Float rotation WDP +7% +9% +42% 4,347 76% 6.7 498 1 M 6 M 12 M (€ m) (%) (€ m) (trading days) Argan +2% +25% +62% 1,764 41% 0.3 2,471 Covivio Hotels +2% +13% +21% 3,571 6% 0.1 2,710 Segro +0% +18% +44% 11,709 75% 23.9 367 Pandox +1% +20% +41% 3,789 13% 3.9 122
− Healthcare – Stock Performance since January 2017 − Student Housing – Stock Performance since January 2017
240a 210a 200 160 160 120 80 40 110 0 06/01/17 06/08/17 06/03/18 06/10/18 06/05/19 06/12/19 Aedifica Assura Care Property PHP 60 Stock performance Capi. Float Vol.* Float rotation 06/01/17 06/08/17 06/03/18 06/10/18 06/05/19 06/12/19 1 M 6 M 12 M (€ m) (%) (€ m) (trading days) Empiric Student Xior Aedifica +7% +26% +67% 2,992 100% 4.2 709 Stock performance Capi. Float Vol.* Float rotation Assura +0% +20% +43% 2,223 44% 3.5 281 1 M 6 M 12 M (€ m) (%) (€ m) (trading days) Care Property +5% +22% +57% 656 100% 1.0 668 Empiric Student +3% +13% +14% 713 56% 1.1 372 PHP +1% +20% +47% 2,273 72% 4.2 390 Xior +2% +18% +41% 1,014 86% 1.1 823 Source: Bloomberg * 3-month average daily volumes
8 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
C2 - Internal Natixis Analysts’ Consensus (1/6)
Consensus on main European Players
26 21 26 15 19 22 21 19 17 21 19 6 +4.5% +4.9% +2.1% -7.4% -1.3% +19.2% +5.8% -2.4% -10.0% +5.8% -0.4% -9.1% 17% 24% 29% 24% 21% 40% 37% 36% 32% 58% 69% 62% 43% 43% 47% 41% 67% 27% 32% 41% 42% 31% 33% 27% 33% 33% 33% 32% 23% 26% 29% 32% 4% 5% 12% 17% Vonovia LEG Deutsche Covivio Land Unibail- Hammerson Klépierre Icade Hammer. British Swiss Immobilien Wohnen Sec. Rodamco- Land Prime AG Westfield Site Buy Hold Sell # brokers Upside potential
Consensus on main French Players
3 9 15 22 17 19 17 8 4 -3.9% -3.4% -7.4% +19.2% -8.8% -2.4% -10.0% -5.0% -12.2%
25% 35% 32% 29% 44% 40% 36% 67% 75% 38% 27% 42% 41% 22% 41% 47%
33% 33% 33% 29% 38% 23% 18% 26% 25%
Altarea Mercialys Covivio Unibail-Rodamco- Gecina Klépierre Icade Carmila SFL Westfield
Buy Hold Sell # brokers Upside potential
Source: Bloomberg
9 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
C2 - Internal Natixis Analysts’ Consensus (2/6)
Last Changes in Brokers’ Recommendations / Target Prices for Selected European Players
Date Company Broker Reco. Target Price Date Company Broker Reco. Target Price 9-Jan ADO Barclays underweight € 26.0 23-Jan British Land AlphaValue reduce GBp 543.0 14-Jan Aedifica Degroof Petercam add € 126.0 13-Jan Carmila Oddo BHF neutral € 20.0 14-Jan Aedifica Kempen & Co buy € 125.0 17-Jan Castellum Goldman Sachs sell SEK 158.0 21-Jan Aedifica Oddo BHF neutral new € 116.0 new 24-Jan Castellum Kempen & Co neutral SEK 225.0 13-Jan Alstria Kempen & Co buy € 18.3 27-Jan Castellum Kepler Cheuvreux buy SEK 260.0 16-Jan Astria JP Morgan overweight € 19.5 29-Jan Castellum JP Morgan overweight SEK 250.0 17-Jan Astria Goldman Sachs neutral € 17.1 16-Jan Citycon JP Morgan neutral € 9.6 13-Jan Aroundtown HSBC buy € 11.0 17-Jan Citycon Goldman Sachs sell € 6.3 16-Jan Assura JP Morgan overweight GBp 81.0 14-Jan Cofinimmo Kepler Cheuvreux buy new € 143.0 new 14-Jan British Land Kempen & Co neutral GBp 610.0 14-Jan Cofinimmo Kempen & Co buy new € 143.0 new 15-Jan British Land Jefferies underperform GBp 450.0 21-Jan Cofinimmo Oddo BHF buy new € 139.0 new 16-Jan British Land JP Morgan neutral GBp 630.0 13-Jan Covivio Oddo BHF buy € 110.0 17-Jan British Land Goldman Sachs buy GBp 661.0 14-Jan Covivio Kempen & Co sell € 93.0
Source: Bloomberg
10 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
C2 - Internal Natixis Analysts’ Consensus (3/6)
Last Changes in Brokers’ Recommendations / Target Prices for Selected European Players
Date Company Broker Reco. Target Price Date Company Broker Reco. Target Price 16-Jan Covivio JP Morgan neutral € 110.0 23-Jan Deutsche Wohnen AlphaValue buy € 45.5 17-Jan Covivio Goldman Sachs buy € 120.3 14-Jan Eurocomm. Kempen & Co sell new € 22.0 new 20-Jan Covivio Morgan Stanley overweight € 106.0 17-Jan Eurocomm. Goldman Sachs sell € 21.4 23-Jan Covivio AlphaValue reduce € 94.4 14-Jan Fabege Kempen & Co buy SEK 180.0 14-Jan Derwent London Kempen & Co neutral GBp 4200.0 17-Jan Fabege Goldman Sachs sell SEK 122.1 15-Jan Derwent London Jefferies underperform GBp 3000.0 23-Jan Fabege Kepler Cheuvreux buy SEK 175.0 16-Jan Derwent London JP Morgan underweight GBp 3720.0 14-Jan Gecina Kempen & Co buy € 175.0 17-Jan Derwent London Goldman Sachs neutral GBp 4277.0 new 15-Jan Gecina Jefferies hold € 155.0 14-Jan Deutsche Euro. Kempen & Co sell new € 23.0 16-Jan Gecina AlphaValue reduce € 159.0 16-Jan Deutsche Euro. JP Morgan neutral € 25.8 16-Jan Gecina JP Morgan overweight € 173.0 14-Jan Deutsche Wohnen Kempen & Co buy € 41.0 17-Jan Gecina Goldman Sachs neutral € 161.5 17-Jan Deutsche Wohnen Goldman Sachs neutral € 36.8 new 9-Jan Grand City Property Barclays equalweight new € 22.7 new 21-Jan Deutsche Wohnen RBC Capital Markets outperform new € 43.0 14-Jan Grand City Property Kempen & Co sell new € 19.0 new
Source: Bloomberg
11 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
C2 - Internal Natixis Analysts’ Consensus (4/6)
Last Changes in Brokers’ Recommendations / Target Prices for Selected European Players
Date Company Broker Reco. Target Price Date Company Broker Reco. Target Price 16-Jan Grand City Property JP Morgan overweight € 24.5 20-Jan Icade Morgan Stanley equalweight € 93.0 14-Jan Great Port. Kempen & Co buy GBp 945.0 21-Jan Icade Oddo BHF buy € 108.0 15-Jan Great Port. Jefferies underperform GBp 700.0 30-Jan Icade AlphaValue reduce € 93.5 16-Jan Great Port. JP Morgan neutral GBp 880.0 14-Jan Inmobilaria Colonial Kempen & Co buy new € 13.0 new 17-Jan Great Port. Goldman Sachs neutral GBp 846.0 16-Jan Inmobilaria Colonial JP Morgan overweight € 12.3 14-Jan Hammerson Kempen & Co neutral GBp 270.0 17-Jan Inmobilaria Colonial Goldman Sachs buy € 12.7 16-Jan Hammerson JP Morgan neutral GBp 300.0 20-Jan Inmobilaria Colonial Morgan Stanley overweight € 13.0 17-Jan Hammerson Goldman Sachs buy GBp 316.0 23-Jan Inmobilaria Colonial AlphaValue reduce € 11.2 30-Jan Hammerson AlphaValue reduce GBp 252.0 15-Jan Intu Prop. Jefferies underperform GBp 20.0 14-Jan Hufvudstaden Kempen & Co neutral new SEK 200.0 new 17-Jan Intu Prop. Goldman Sachs sell GBp 22.0 23-Jan Hufvudstaden Kepler Cheuvreux buy SEK 210.0 28-Jan Intu Prop. Stifel sell GBp 15.0 16-Jan Icade JP Morgan neutral € 100.0 30-Jan Intu Prop. AlphaValue sell GBp 9.9 17-Jan Icade Goldman Sachs sell € 87.9 30-Jan Intu Prop. JP Morgan underweight GBp 25.0
Source: Bloomberg
12 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
C2 - Internal Natixis Analysts’ Consensus (5/6)
Last Changes in Brokers’ Recommendations / Target Prices for Selected European Players
Date Company Broker Reco. Target Price Date Company Broker Reco. Target Price 15-Jan Klépierre Jefferies hold € 29.0 30-Jan Mercialys AlphaValue add € 12.9 16-Jan Klépierre JP Morgan neutral € 36.0 16-Jan Merlin Properties JP Morgan overweight € 14.5 17-Jan Klépierre Goldman Sachs neutral € 32.2 17-Jan Merlin Properties Goldman Sachs sell € 11.4 30-Jan Klépierre AlphaValue sell € 25.9 23-Jan Pandox Kepler Cheuvreux buy SEK 240.0 14-Jan Land Sec. Kempen & Co buy GBp 1060.0 15-Jan PHP Jefferies hold GBp 155.0 15-Jan Land Sec. Jefferies underperform GBp 800.0 14-Jan PSP Kempen & Co neutral CHF 136.0 17-Jan Land Sec. Goldman Sachs buy GBp 1080.0 16-Jan PSP JP Morgan underweight CHF 130.0 30-Jan Land Sec. AlphaValue reduce GBp 868.0 22-Jan PSP MainFirst Bank buy new CHF 155.0 new 3-Jan LEG Immobilien Commerzbank buy € 122.0 14-Jan Segro Kempen & Co buy GBp 960.0 9-Jan LEG Immobilien Barclays underweight new € 100.0 new 15-Jan Segro Jefferies hold GBp 900.0 14-Jan LEG Immobilien Kempen & Co neutral new € 115.0 new 16-Jan Segro JP Morgan neutral GBp 855.0 16-Jan LEG Immobilien JP Morgan overweight € 120.0 17-Jan Segro Goldman Sachs neutral GBp 954.0 14-Jan Mercialys Kempen & Co sell new € 10.5 new 30-Jan Segro AlphaValue sell GBp 617.0
Source: Bloomberg
13 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
C2 - Internal Natixis Analysts’ Consensus (6/6)
Last Changes in Brokers’ Recommendations / Target Prices for Selected European Players
Date Company Broker Reco. Target Price Date Company Broker Reco. Target Price 14-Jan Shaftesbury Kempen & Co sell GBp 850.0 21-Jan Vonovia RBC Capital Markets sector perform new € 52.0 new 15-Jan Shaftesbury Jefferies underperform GBp 790.0 30-Jan Vonovia AlphaValue add € 54.5 17-Jan Shaftesbury Goldman Sachs sell GBp 789.0 14-Jan WDP Kempen & Co buy € 25.5 14-Jan Swiss Prime Site Kempen & Co sell CHF 108.0 27-Jan WDP ABN Amro Bank sell € 19.0 22-Jan Swiss Prime Site MainFirst Bank hold new CHF 113.0 new 14-Jan Wereldhave Kempen & Co sell new € 17.0 new 14-Jan TAG Immobilien Kempen & Co neutral new € 23.0 new 17-Jan Wereldhave Goldman Sachs sell € 17.1 14-Jan Unibail Kempen & Co sell new € 122.0 new 29-Jan Wereldhave AlphaValue add € 18.8 16-Jan Unibail JP Morgan neutral € 145.0 14-Jan Xior Kempen & Co neutral € 54.0 17-Jan Unibail Goldman Sachs neutral € 140.0 30-Jan Unibail AlphaValue buy € 181.0 14-Jan Vonovia Kempen & Co neutral € 52.0 17-Jan Vonovia Goldman Sachs buy € 62.1 20-Jan Vonovia JP Morgan overweight € 56.0
Source: Bloomberg
14 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
C2 - Internal Natixis Valuation of Real Estate Stocks (1/4)
French Large & Mid Cap
French Players
Market cap. LTV (%) P / NNNAV P / NAV EV / EBITDA P / CF Dividend Yield Company Activity (€m) lr (2) lr (3) 2019E 2020E 2019E 2020E 2021E 2019E 2020E 2021E 2019E 2020E 2021E Large Cap Altarea Retail 3,354 34% 30% 36% 32% 20.3x 19.2x 17.7x 11.9x 11.4x 11.6x 6.2% 6.4% 6.6% Argan Industrials 1,310 56% n.m. n.m. n.m. 23.4x 16.2x n.m. n.m. n.m. n.m. 1.9% 2.2% 2.3% Carmila Retail 2,474 39% (29%) (33%) (33%) 17.1x 16.2x 15.4x 11.2x 11.0x 10.6x 8.3% 8.4% 8.6% Covivio Hotels Hotels / div. 3,546 39% 14% n.m. n.m. 23.6x n.m. n.m. n.m. n.m. n.m. 5.3% n.m. n.m. Covivio Diversified 9,393 41% 19% 8% 5% 39.3x 38.4x 36.9x 20.3x 19.9x 18.8x 4.4% 4.6% 4.8% Gecina Offices 12,537 37% 3% (1%) (4%) 37.2x 36.7x 35.9x 29.1x 28.2x 27.3x 3.3% 3.3% 3.4% Icade Diversified 7,387 41% 12% 6% 4% 24.2x 23.5x 21.8x 20.1x 19.3x 17.6x 4.8% 5.0% 5.2% Klepierre Retail 9,213 37% (16%) (20%) (16%) 19.0x 18.9x 18.7x 11.4x 11.1x 10.7x 7.0% 7.3% 7.3% Mercialys Retail 1,056 42% (44%) (41%) (33%) 17.2x 17.1x 16.8x 8.7x 8.5x 8.4x 10.0% 10.2% 10.2% SFL Offices 3,676 26% (8%) (14%) (15%) 33.5x 32.2x 29.9x 33.1x 29.2x 26.3x 3.1% 3.1% 3.1% Unibail Rodamco - West. Retail 17,212 38% (37%) (36%) (34%) 16.4x 16.1x 15.9x 9.3x 8.9x n.m. 8.7% 8.8% 8.8% Median 39% (3%) (14%) (15%) 23.4x 19.0x 18.7x 11.9x 11.4x 14.6x 5.3% 5.7% 5.9% Mid Cap Cegereal Offices 684 52% 4% (2%) (7%) 25.9x 25.0x 25.0x 16.5x 15.9x n.m. 5.6% 5.8% 6.0% Frey Retail 843 24% 13% 23% (16%) 25.7x 24.0x 20.1x 23.0x 20.0x 17.1x 3.3% 3.3% 5.3% Immobiliere Dassault Offices 518 41% 34% n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. Inea Diversified 349 39% (8%) n.m. n.m. 23.4x 20.3x 17.2x n.m. n.m. n.m. 5.3% 5.7% 5.9% Patrimoine & Commerce Retail 299 47% n.m. (20%) (24%) 18.1x 16.8x 15.3x 10.9x 10.0x 9.4x 5.8% 6.3% 6.7% Selectirente Retail 366 n.m. (3%) n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. Société de la Tour Eiffel Offices 627 58% (23%) n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. Median 44% 1% (2%) (16%) 24.5x 22.2x 18.6x 16.5x 15.9x 13.3x 5.4% 5.7% 6.0%
(1) Market capitalisation based on last spot price as of 31/01/2020 (2) Loan-to-Value (LTV) last reported: Net Financial Debt / Asset Valuation excl. transfer rights (3) Price / last reported NNNAV
Sources: Bloomberg, Companies
15 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
C2 - Internal Natixis Valuation of Real Estate Stocks (2/4)
European Retail & Offices players
European Players (1/3)
Market cap. LTV (%) P / NNNAV P / NAV EV / EBITDA P / CF Dividend Yield Company Activity (€m) lr (2) lr (3) 2019E 2020E 2019E 2020E 2021E 2019E 2020E 2021E 2019E 2020E 2021E Retail Altarea Retail 3,354 34% 30% 36% 32% 20.3x 19.2x 17.7x 11.9x 11.4x 11.6x 6.2% 6.4% 6.6% Carmila Retail 2,474 39% (29%) (33%) (33%) 17.1x 16.2x 15.4x 11.2x 11.0x 10.6x 8.3% 8.4% 8.6% Citycon Retail 1,709 50% (19%) (21%) (22%) 19.5x 19.6x 19.2x 13.0x 13.0x 12.8x 6.8% 6.6% 6.6% Deutsche Euroshop Retail 1,538 31% n.m. (41%) (40%) 12.3x 12.5x 12.6x 10.3x 10.2x 10.1x 6.2% 6.4% 6.4% Eurocommercial Retail 1,140 44% (40%) (44%) (44%) 18.4x 18.5x n.m. 18.7x 9.6x 9.5x 4.8% 9.5% 9.6% Hammerson Retail 2,210 37% (67%) (62%) (61%) 17.1x 19.1x 21.2x 9.0x 16.7x 16.8x 10.6% 10.0% 9.8% Intu properties Retail 283 49% (94%) (91%) (90%) 13.7x 15.6x 16.4x 1.8x 1.5x 4.3x - - - Klepierre Retail 9,213 37% (16%) (20%) (16%) 19.0x 18.9x 18.7x 11.4x 11.1x 10.7x 7.0% 7.3% 7.3% Mercialys Retail 1,056 42% (44%) (41%) (33%) 17.2x 17.1x 16.8x 8.7x 8.5x 8.4x 10.0% 10.2% 10.2% Retail Estate Retail 1,051 52% 34% 25% 22% 21.5x 19.7x n.m. 14.5x 13.8x 13.1x 5.3% 5.6% 6.0% Shaftesbury Retail 3,284 23% (8%) (8%) (8%) 41.4x 38.0x n.m. 49.8x 46.7x n.m. 2.0% 2.1% n.m. Unibail Rodamco- West Retail 17,212 38% (37%) (36%) (34%) 16.4x 16.1x 15.9x 9.3x 8.9x n.m. 8.7% 8.8% 8.8% Wereldhave Retail 687 42% (63%) (55%) (52%) 14.3x 14.5x 14.4x 6.1x 6.1x 6.3x 14.8% 13.9% 13.6% Median 39% (33%) (36%) (33%) 17.2x 18.5x 16.6x 11.2x 11.0x 10.6x 6.8% 7.3% 7.9% Offices Alstria Office 3,135 30% 18% 0% (7%) 30.1x 30.5x 28.1x 27.9x 27.7x 25.9x 3.0% 3.0% 3.1% Befimmo Offices 1,407 44% (2%) (8%) (8%) 23.9x 25.1x 24.2x 16.8x 17.3x 17.1x 5.9% 5.9% 5.9% Derwent Offices 5,453 19% 9% 5% 6% 39.2x 34.4x 31.8x 39.0x 35.1x 33.1x 1.8% 1.9% 2.1% Fabege Offices 5,129 39% 37% 18% 7% 40.6x 39.7x 37.2x 36.6x 35.7x 31.9x 1.8% 1.9% 2.0% Gecina Offices 12,537 37% 3% (1%) (4%) 37.2x 36.7x 35.9x 29.1x 28.2x 27.3x 3.3% 3.3% 3.4% Great portland Offices 3,166 6% 10% 8% 8% n.m. n.m. n.m. 51.5x 46.7x 41.3x 1.4% 1.4% 1.5% Immobiliaria Colonial Offices 6,133 41% 43% 9% (0%) 45.6x 43.7x 39.7x 46.9x 45.0x 40.6x 1.8% 2.0% 2.1% PSP Offices 6,221 39% 58% 51% 48% 37.1x 37.1x 36.1x 33.3x 33.1x 30.8x 2.5% 2.5% 2.6% SFL Offices 3,676 26% (8%) (14%) (15%) 33.5x 32.2x 29.9x 33.1x 29.2x 26.3x 3.1% 3.1% 3.1% Median 37% 10% (5%) 0% 37.2x 35.5x 33.8x 33.3x 33.1x 30.8x 2.5% 2.5% 2.6% (1) Market capitalisation based on last spot price as of 31/01/20 (2) Loan-to-Value (LTV) last reported: Net Financial Debt / Asset Valuation excl. transfer rights (3) Price / last reported NNNAV
Sources: Bloomberg, Companies
16 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
C2 - Internal Natixis Valuation of Real Estate Stocks (3/4)
European Residential & Diversified & alternative assets
European Players (2/3) Market cap. LTV (%) P / NNNAV P / NAV EV / EBITDA P / CF Dividend Yield Company Activity (€m) lr (2) lr (3) 2019E 2020E 2019E 2020E 2021E 2019E 2020E 2021E 2019E 2020E 2021E Residential ADO Properties Residential 1,246 40% (42%) (55%) (55%) 16.8x 31.2x 27.3x 19.0x 20.2x 18.9x 2.7% 2.6% 2.7% Adler Residential 854 65% (52%) (45%) (46%) 18.6x 28.7x 23.4x 10.7x 10.2x 9.6x - - - Deutsche Wohnen Residential 13,681 34% 20% (14%) (16%) 31.2x 32.0x 31.5x 25.7x 25.2x 24.8x 2.5% 2.6% 2.6% Grand City Property Residential 3,856 35% 12% (7%) (11%) 23.8x 22.5x 21.0x 19.8x 18.7x 17.5x 3.6% 3.8% 4.1% LEG Immobilen Residential 7,036 42% 60% 5% (1%) 28.2x 26.3x 24.7x 21.8x 20.6x 19.7x 3.3% 3.5% 3.7% TAG Immobilen Residential 3,465 50% 64% 19% 12% 26.7x 25.4x 23.9x 22.1x 20.6x 19.6x 3.4% 3.7% 3.9% Vonovia Residential 27,992 44% 51% (2%) (8%) 29.0x 26.4x 24.6x 23.5x 21.8x 21.3x 3.0% 3.3% 3.5% Median 42% 20% (4%) (9%) 27.4x 27.6x 24.7x 21.9x 20.6x 19.7x 3.2% 3.4% 3.6% Diversified Aroundtown Diversified 9,503 35% 9% (3%) (11%) 22.1x 19.7x 17.5x 30.1x 27.0x 24.5x 3.3% 3.7% 4.1% British Land Diversified 6,320 31% (28%) (33%) (29%) 15.2x 15.0x 14.7x 17.1x 16.8x 16.0x 5.5% 5.6% 5.8% Castellum Diversified 6,064 45% 46% 13% 7% 25.5x 24.4x 23.8x 21.3x 20.0x n.m. 2.9% 3.0% 3.2% Confinimmo Diversified 3,312 42% 55% 45% 37% 26.8x 25.2x 23.8x 21.2x 20.5x 19.4x 3.7% 3.8% 3.9% Covivio Diversified 9,393 41% 19% 8% 4% 39.3x 38.4x 36.9x 20.3x 19.9x 18.8x 4.4% 4.6% 4.8% Hufvudstaden Diversified 3,664 15% 17% 2% (5%) 34.2x 32.4x 29.8x 35.9x 33.0x 30.2x 2.1% 2.2% 2.4% Icade Diversified 7,387 41% 12% 6% 4% 24.2x 23.5x 21.8x 20.1x 19.3x 17.6x 4.8% 5.0% 5.2% Land Securities Diversified 8,357 26% (31%) (26%) (23%) 23.0x 23.1x 22.9x 16.0x 16.5x n.m. 4.9% 5.0% 5.2% Merlin properties Diversified 6,037 43% (2%) (17%) (19%) 28.1x 26.1x 24.2x 20.1x 19.1x 17.8x 3.9% 4.4% 4.6% Swiss Prime Site Diversified 8,347 48% 76% 49% 42% 26.0x 28.6x 28.6x 29.6x 28.7x 27.3x 3.2% 3.3% 3.3% TLG Diversified 3,382 40% 48% (2%) (7%) 26.8x 26.1x 24.7x 22.4x 20.7x 19.3x 3.1% 3.4% 3.7% Median 41% 17% 2% (5%) 26.0x 25.2x 23.8x 21.2x 20.0x 19.3x 3.7% 3.8% 4.1% (1) Market capitalisation based on last spot price as of 31/01/20 (2) Loan-to-Value (LTV) last reported: Net Financial Debt / Asset Valuation excl. transfer rights (3) Price / last reported NNNAV
Sources: Bloomberg, Companies
17 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
C2 - Internal Natixis Valuation of Real Estate Stocks (4/4)
Alternative assets
European Players (3/3) Market cap. LTV (%) P / NNNAV P / NAV EV / EBITDA P / CF Dividend Yield Company Activity (€m) lr (2) lr (3) 2019E 2020E 2019E 2020E 2021E 2019E 2020E 2021E 2019E 2020E 2021E Student housing Xior Student Prop. 1,014 65% 78% 55% 45% 42.3x 34.6x 28.4x 34.2x 31.2x 26.1x 2.4% 2.6% 2.9% Empiric Student Prop. 716 34% (4%) (8%) (11%) 24.3x 21.5x 20.6x n.m. n.m. n.m. 5.0% 5.0% 5.1% Median 50% 37% 23% 17% 33.3x 28.1x 24.5x 34.2x 31.2x 26.1x 3.7% 3.8% 4.0% Healthcare Aedifica Healthcare 2,957 38% 108% 91% 73% 29.1x 24.1x 20.7x 29.3x 26.5x 23.5x 2.5% 2.9% 3.1% Assura Healthcare 2,247 30% 50% 45% 40% 27.3x 26.8x n.m. n.m. n.m. n.m. 3.5% 3.7% 3.8% Care Property Invest. Healthcare 618 79% 107% 83% 67% 36.2x 31.3x 27.6x 33.7x 30.3x 25.7x 2.5% 3.0% 3.3% PHP Healthcare 2,142 45% 60% 49% 45% 28.9x 25.0x 23.5x n.m. n.m. n.m. 3.5% 3.7% 3.8% Median 41% 84% 66% 56% 29.0x 25.9x 23.5x 31.5x 28.4x 24.6x 3.0% 3.3% 3.6% Logistics WDP Industrials 4,080 55% 151% 118% 87% 30.1x 27.6x 24.7x 26.7x 24.6x 22.8x 2.9% 3.2% 3.5% Argan Industrials 1,310 n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. Segro Industrials 11,819 29% 55% 29% 22% 33.5x 30.3x 27.9x 39.1x 33.7x 30.9x 2.2% 2.4% 2.6% Median 42% 103% 73% 54% 31.8x 28.9x 26.3x 32.9x 29.2x 26.8x 2.6% 2.8% 3.0% Hotels Covivio Hotel Hotel 3,546 39% 14% n.m. n.m. 23.6x n.m. n.m. n.m. n.m. n.m. 5.3% n.m. n.m. Pandox Hotel 3,373 51% n.m. 19% 8% 21.2x 19.0x 18.4x 18.1x 16.3x 15.5x 2.3% 2.5% 2.6% Median 45% 14% 19% 8% 22.4x 19.0x 18.4x 18.1x 16.3x 15.5x 3.8% 2.5% 2.6% (1) Market capitalisation based on last spot price as of 31/01/20 (2) Loan-to-Value (LTV) last reported: Net Financial Debt / Asset Valuation excl. transfer rights (3) Price / last reported NNNAV
Sources: Bloomberg, Companies
18 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
C2 - Internal Natixis Long-term Valuation Metrics
NAV & P/CF ratios
Offices & diversified Premium/Discount to NAV of Selected Players (last reported) players (Icade, Covivio and Gecina) are trading 90% with a premium to NAV 70% while retail players (Klépierre and Unibail) 50% with a discount to NAV 30% 10% P/CF ratio is around 16x -10% -30% -50% -70% -90% Jan-07 Sep-07May-08Jan-09 Sep-09May-10Jan-11 Sep-11May-12Jan-13 Sep-13May-14Jan-15 Sep-15May-16Jan-17 Sep-17May-18Jan-19 Sep-19 Gecina Icade Klépierre Unibail Covivio
Average of Premium/Discount to NAV of Selected Players P/CF-Forward Evolution of Selected Players
80% 30x 60% 25x 40% 20% 20x 0% 15x -20% 10x -40% 5x -60% -80% 0x Jan-07 Jul-08 Jan-10 Jul-11 Jan-13 Jul-14 Jan-16 Jul-17 Jan-19 Jan-08 Jul-09 Jan-11 Jul-12 Jan-14 Jul-15 Jan-17 Jul-18
Gecina Icade Klépierre Unibail Covivio LT Average Source: Datastream
19 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
C2 - Internal Natixis Other Newsflows from the Real Estate Sector last updated 31st of January 2020
. Completion of the merger between Aroundtown and TLG. Aroundtown has announced that at the end of the initial acceptance period for the voluntary exchange offer for all outstanding shares in TLG IMMOBILIEN AG an acceptance level of 59.4% was achieved. TLG shareholders will receive 3.6 Aroundtown shares for each of their shares.
. Aedifica launched a voluntary public cash tender offer for all of the issued and outstanding shares in Hoivatilat. The offer M&A price was EUR 16.00 per share, to be paid fully in cash, valuing Hoivatilat's equity at approximately €408 million. Aedifica released 98.2% of all issued and outstanding shares and votes in Hoivatilat at the end of that tender offer (30/01/20).
. ADLER successfully completed the acquisition of 100% shares in ADO Group for €708m resulting in ADLER holding a 33.25% stake in ADO Properties.
. The Valesco Group has secured the acquisition, of the Finance Tower, a skyscraper located in Brussels’ CBD from Breevast and ZBG for €1.2bn. This acquisition is the second largest single asset acquisition in mainland Europe ever.
. Blackstone Tactical Opportunities and Round Hill Capital, have sold their shares of a residential property portfolio in the Czech Republic to Heimstaden Bostad AB for a net consideration of €1.3bn. Heimstaden has acquired the largest privately held residential portfolio in the Czech Republic with 42,584 residential units and 1,675 commercial units. Main asset transaction . Varde Partners, who operates under The Dedica Anthology brand, has found an agreement with Covivio to sell a portfolio of eight luxury hotels located in Nice, Rome, Budapest, Prague, Florence and Venice for €600m.
. ECE has completed the purchase of Intu Asturias shopping center from Intu properties plc and Canada Pension Plan Investment Board for €290m. With that investment, ECE Fund II is fully invested. . Union investment and Generali Real Estate have signed an agreement with Intu and Canada Pension Plan Investment Board to purchase the Puerto Venecia shopping resort in Zaragoza for €475m.
. The Valesco Group has compelled a €720m senior loan facility from a consortium comprising Allianz, LGIM or Bayern LB to finance its major purchase. DCM / Credit . Aroundtown has announced offer to the holders of its €650m 1.5% notes due 2024 to tender such Notes for purchase for cash.
Source: Europe Real Estate
20 FEBRUARY 2020 | CORPORATE & INVESTMENT BANKING
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