- LondonMetric Property
- 10 December 2024 10:52:19
Source: Sharecast
The bank said that lower yields - to the extent they were expected - did not materialise in 2024 while engagement with a higher-for-longer environment in the fourth quarter has seen the sector de-rate into year-end.
"Lower yields are unlikely to come to the rescue in 2025 (here), but we find the sector trading at such a level that we do not need to incorporate lower yields to see average upside of 21%," it said.
"We take on board the diverging top-down view for the Euro area and the UK, preferring residential over commercial property in the former and those with pricing power in the latter."
As a result, JPM said it was remaining constructive on German residential (Vonovia and LEG), while its top picks include ‘overweight’ rated Tritax Big Box and Merlin.
JPM upgraded Unite to ‘overweight’ from ‘neutral’ and cut the price target to 1,070p from 1,100p.
It downgraded LondonMetric to ‘neutral’ from ‘overweight’ and cut the price target to 226p from 235p after an "impressive" 2024 and relatively limited upside potential from here.
JPM downgraded Cofinimmo to ‘underweight’ from ‘neutral’ on balance sheet risk and Gecina to ‘neutral’ from ‘overweight’ given its exposure to France and the macro-political risks there.
Finally, the bank cut both Kojamo and Klepierre to ‘underweight’ from ‘neutral’ on relative valuation grounds.