Global real estate stocks are emerging from the recession leaner, better financed, and well-placed to take advantage of the expected pick-up in demand for commercial property space when economic recovery gathers pace, equity specialist AXA Framlington said in new research report.
Global real estate stocks are emerging from the recession leaner, better financed, and well-placed to take advantage of the expected pick-up in demand for commercial property space when economic recovery gathers pace, equity specialist AXA Framlington said in new research report.
'While the market and economic environment has turned cloudy over recent months, we believe the current problems are not sufficient to derail the positive outlook for commercial real estate,' said Frédéric Tempel, head of European real estate securities for AXA Framlington. 'The global economy remains expansionary and commercial property fundamentals are generally improving, as steady demand for space continues to outstrip historically low supply. Meanwhile, ongoing extremely low interest rates mean the yield available from real estate remains compelling.'
The firm said global real estate equities currently offer an attractive dividend yield in the range of 3.0% - 4.0%. As market fundamentals improve, average dividends should rise further over the next couple of years.
Tempel: 'Current property equities price levels appear low compared with direct real estate valuations, with stocks, in many cases, trading at significant discounts to estimated net asset value (NAV). This situation represents significant recovery potential for real estate securities.'
