Share prices of real estate companies exposed to Europe’s troubled southern flank are being ravaged by “apocalyptic” fears of a break-up of the eurozone, say Kempen & Co, a Dutch merchant bank and broker.
Dick Boer, executive director of corporate finance at Kempen, told FTfm that since June investors were frightened about the possibility of the currency bloc breaking apart.
As a result, real estate companies listed in Portugal, Italy, Greece and Spain trade at a discount of 48 per cent to net asset value, while those listed elsewhere but with at least one-fifth of their assets in southern Europe were on a 22 per cent discount, twice that of companies with little exposure to the region.
Klépierre, a French company with significant exposure to southern Europe, is trading on a discount of 28 per cent, while French peer Unibail-Rodamco, which does not, is on a premium of 11 per cent.
Speaking at the annual European Public Real Estate Association conference last week, Mr Boer said this “astonishing decoupling” reflected fears that, for example, Spanish shopping centres and debt attached to them, could ultimately be valued in steeply discounted “old euros”, relative to comparable real estate assets priced in a separate new currency bloc centred on Germany.
Mr Boer added that the “striking disparity” in the prices of public equities could presage movements in the far less liquid physical property market.
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