REAL ESTATE BAROMETER

Euronext and EPRA (the European Public Real Estate Association) are delighted to introduce their first Real Estate Barometer. Discover the Real Estate sector trends and key figures throughout H1 2020 on Euronext’s capital markets. Find out more about key insights on performance, sector valuation, trading and capital markets activity, as well as sell-side coverage and and ESG trends of Euronext-listed Real Estate companies. In addition, learn more about the impact COVID-19 has had on the sector.

SOME HIGHLIGHTS

€85 BILLION OF MARKET CAPITALISATION FOR REAL ESTATE ISSUERS LISTED ON EURONEXT MAIN MARKETS:

• France represents the largest market for Real Estate issuers with 27 companies listed, followed with 22 in Belgium, 9 in the Netherlands, 5 in Norway, and 3 in Ireland.
• Market capitalisation remains concentrated around Real Estate Investment Trusts (REITs) which account for 79% of the total sector market capitalisation, compared to 21% for Real Estate Developers. A strong market cap progression for Belgian developers was noted thanks to 2 significant equity deals in H1 2020.
• After a strong performance in 2019, posting on average c. 19% price increase, the sector was impacted by the COVID-related crisis in the first half of the year, dropping by c. 17% on average.
• After the March/April drop, the whole sector started to recover in the last two months of the quarter which helped with secondary market activity as well (see below), which has seen a series of deals priced as soon as markets turned positive again.

SECTOR VALUATION UNDER PRESSURE, YET WITH LARGE DIVERGENCES NOTED ACROSS MARKETS:

• EPRA Net Asset Value discount stood at 26% for total listed Real Estate issuers, up from 5% discount as of end 2019.
• Belgian constituents of the FTSE EPRA Nareit Developed Europe traded at a 26% premium, the highest in Europe.
• Looking at the EPRA Loan-to-Value ratio (indebtment level), the figure stood at 37.26% as of June 2020, at a European level. Overall, there were no large changes in LTV since FY19

STRONG LIQUIDITY AND CAPITAL MARKETS ACTIVITY:

• After a strong 2019 during which trading volumes increased by an average 16% across the sector, Real Estate issuers experienced a further increase in trading volumes in the first half of 2020, in line with the global market trend.
• Both large-caps and mid-caps saw their average daily turnover increasing significantly during H1 2020 while small caps saw a marginal drop.
• Since January, a total of 9 equity deals were priced, for a total money raised of c. €713 million. Belgium was the most active market with 7 out of these 9 deals happening there, showcasing that investors’ appetite for the sector (despite the fact that companies are trading at a NAV premium in Belgium) is still very high.

ANALYSTS’ COVERAGE:

• Given the regular secondary market activity, the sector is rather well covered by analysts. From small-caps to large-caps, companies have a median coverage of 2 to 6 analysts.

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