Real estate investment companies (REICs) are expected to end the year with portfolios worth more than €5.7bn, as interest rates rise and property valuations come under pressure, analysts and industry figures told Euro2day.gr.
This would represent an increase of 7.5% from first-half levels, with the largest gain expected at Premia Properties, which is targeting investments of €1bn by the end of December.
Among the four REICs most closely followed by analysts—Trade Estates, Noval Property, Briq Properties and Premia Properties—the increase is expected to be steeper, reaching 12%.
Greater visibility
Industry analysts say the cycle of portfolio optimisation among REICs has largely been completed, and there is now greater visibility on the next phase.
«The fundamentals of the Greek property market remain supportive, with attractive initial yields, limited supply of modern properties and steady momentum in rents», explain experts who closely follow the sector.
However, they add, the latest rise in interest rates and long-term bond yields is expected to limit further across-the-board increases in property values and could once again put pressure on company valuations.
Ambitious plans
At Premia Properties, ambitious investment plans are under way, with projects already at an advanced stage. In the summer, management said it was targeting a portfolio approaching €1bn, up from €755m at the end of the first half.
Sources say Premia will comfortably meet its target, while some analysts expect the portfolio to end the year slightly higher, at €1.04bn.
The market also sees a strong growth trajectory for Trade Estates. In the first half, the REIC reported a gross asset value (GAV) of €625m, while analysts estimate that its portfolio could grow by more than 10% in the second half.
Trade Estates operates in sectors with favourable supply and demand conditions, such as retail parks and logistics, with rental yields above 7%, providing headroom to cover financing costs and resilience to rising interest rates, analysts add.
Completing the quartet is Briq Properties, whose shares are attracting investor interest as they trade at the lowest discount in the sector (about 20%).
Estimates suggest its total investments will edge up by year-end to €300-305m, from €295m on 30 June.
The €5.7bn portfolio estimate also includes figures for Prodea, Trastor, Orilina and Blue Cedar.