European listed sector shows signs of rebound

Europe's listed property sector picked up momentum in March, returning 4.54% on average - the third month in a row in positive territory. After sharp losses in 2011, the industry recovered some ground, showing 8% growth in total in the first quarter of the year, data provided by Amsterdam-based Global Property Research shows.

German property firms such as Gagfah, IVG Immobilien and Deutsche Wohnen, but also retail players Corio and Vastned were the best performers last month, reporting double-digit returns of up to nearly 50%.

Gagfah, the largest listed residential property firm in Germany, has skyrocketed since announcing the resolution of its year-long law suit with the city of Dresden, which was claiming contractual penalties of EUR 1.1 bn. The municipality was eventually entitled to damages of just EUR 36 mln, driving Gagfah's share price to a two-year high of EUR 6.35 per share. 'For Gagfah, the impact of this is not negligible, although definitely acceptable,’ commented Kai Klose, an analyst with German private bank Berenberg in London. ‘A major risk factor has now evaporated, which could enable the company to tackle the refinancing of EUR 3.3 bn of CMBS debt due in May/August 2013,' he added.

Similarly, Germany’s IVG Immobilien posted returns of over 13% after announcing a positive outlook for the years ahead. At the presentation of its 2011 annual results, Bonn-based IVG said it expects to break even this year and to return to a 'substantial profit' from 2013. The company posted a lower-than-expected loss of EUR 126 mln in 2011 due to impairments largely booked in the first half on its Squaire development project at Frankfurt airport.

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