(new: headline changed, closing prices, assessments of US inflation data, development of the European industry index)
FRANKFURT (dpa-AFX) – Real estate stocks significantly expanded their price gains on Wednesday after the release of the eagerly awaited US inflation data, at least temporarily. The interest-sensitive sector benefited from the fact that high inflation in the world’s largest economy fell more sharply than expected in March.
The development “should calm the nerves of the Fed a little,” write the analysts at Commerzbank with a view to the future monetary policy the US Federal Reserve. They expect two more rate hikes of 0.25 percentage points each. “However, core inflation is still uncomfortably high,” said analyst Ulrich Wortberg from Landesbank Hessen-Thüringen (Helaba).
The shares of Aroundtown (Aroundtown SA) and Grand City Properties also received new buy recommendations from Societe Generale. The analysts of the major French bank emphasized the sufficient liquidity and the favorable valuation of the commercial real estate specialist Aroundtown, which was upgraded twice.
At the end of trading, the European industry index was at the top of the market-wide Stoxx Europe 600 with a plus of 1.1 percent and thus continued the most recent recovery trend.
In the MDAX of medium-sized German companies, Aroundtown was one of the biggest winners with a plus of 4 percent. The titles of index neighbor TAG Immobilien gained 2.8 percent and those of LEG (LEG Immobilien) 1.6 percent. The Dax (DAX 40) group Vonovia (Vonovia SE (ex Deutsche Annington)) brought a price increase of 1.7 percent to one of the top index positions. Among the best stocks in the SDAX of the smaller capitalized companies were the shares of Grand City Properties, which rose by 2.8 percent, while Deutsche Wohnen (Deutsche Wohnen SE) even rose by 3.9 percent.
In the year to date, real estate stocks are still among the biggest losers on the German stock market, despite the recent gains – with the exception of Tag Immobilien, whose plus of 17 percent is almost twice as high as that of the MDax. In the previous year, the industry had already suffered from the fact that the major central banks had torn the monetary policy controls around in the face of skyrocketing prices and gradually screwed up the record low key interest rates. This generally reduces the attractiveness of stocks compared to fixed income securities such as government bonds. The real estate industry is also suffering from the associated increase in the price of construction financing./gl/he
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