2Yr·

Are real estate shares a buy for you at the moment? In view of upcoming interest rate cuts?

$TEG (-1.18%)
$VNA (+0.07%)
$LEG (+0.25%)
$AT1 (-0.58%)

In my opinion, a clear yes.

I think we are through the worst. What else could possibly happen?

After the last correction I see a buy - now everything is priced in.

How do you see it?

MFG

29 Comments

Homer@Simpson

2Yr

In the short term, profits could be made. In the long term, however, I would only invest in 🇺🇸 real estate shares

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Roman@Roman_moed

2Yr

@Simpson Why only in the short term? The share price of Vonovia, LEG and aroundtown shows that you can also make profits in the long term - if there are no interest rate cuts in between.

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Joker@Blizzard

2Yr

@Simpson something like $VICI $O and $STAG or ?

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SanSebastian@WarrenamBuffet

2Yr

@Blizzard $ADC $EPRT $REXR $ARE

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Homer@Simpson

2Yr

@Roman_moed no longer have confidence in German real estate shares. I invested because I thought it would be a stable business with stable dividends. As soon as interest rates went up, all the shares were shredded, dividends were massively reduced or completely canceled. For me, it gave the impression that the management had no idea about their business. This was also the case with 🇺🇸 shares in terms of price losses, but not to this extent. MPT excepted.

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Joker@Blizzard

2Yr

@Simpson Well, you will always have price losses when interest rates rise. Accordingly, however, the USA Reits have held up much better.

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Roman@Roman_moed

2Yr

@Blizzard The US equities have not been punished as severely as the Germans. German equities are performing faster and better.

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Roman@Roman_moed

2Yr

@Simpson Okay, I can understand why you mean only in the short term. In terms of performance, DE real estate will go down more. But realty is also well punished. I can also put my foot in it

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Joker@Blizzard

2Yr

@Roman_moed Well, but the USA is much more broadly based when compared with Germany ß

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Roman@Roman_moed

2Yr

@Blizzard In what way do you mean that? Overall, the USA is much more broadly based. In the case of Reits, however, there are only companies in both the USA and Germany that work either with commercial real estate or with normal real estate. I don't see a broad positioning. It always depends on what you buy.
Or what do you mean?

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Joker@Blizzard

2Yr

@Roman_moed take $o as an example. Which not only has shopping centers but also more other things. But it also has an interesting portfolio of real estate, which, as you can see, has not been the case since the last purchase. Something more active like that is also somehow missing at Deutsche.

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View all 11 further answers

RealMichaelScott@RealMichaelScott

2Yr

Difficult. It's mainly a game of interest rate cuts. Prices will certainly rise for the time being, but how are these companies positioned in the long term and what are their future prospects?

In Germany in particular, I see many hurdles due to regulations and politics in general. New construction is also expensive in Germany and is set to become even more expensive.

All of the companies you mentioned have shown that their business model works in times of minimal interest rates, but have also shown weaknesses when interest rates have risen to a historically halfway normal level. It became clear that these are not just valuation discounts due to high interest rates when all of the companies mentioned had to cut their dividends sharply or even suspend them.

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Roman@Roman_moed

2Yr

@RealMichaelScott I don't think the business model will change. There will simply be slower growth than back then with the 0% interest rate policy. Nonetheless, shares will gain immensely in value if interest rates are cut, and prices will rise as a result.

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RealMichaelScott@RealMichaelScott

2Yr

@Roman_moed The question is whether they can grow faster than their capital costs in the long term.

If they can increase sales by 5%, but pay 8% interest on their bonds, they only end up destroying capital 🤷‍♂️

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Marco@Marco-VI

2Yr

Not all of them, but I have held #realtyincome #vonovia since the big crash last year - the year before last. Good tournaround candidates for me in the long term. Vonovia especially in Germany for apartments and social housing.

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Janik@JustaKing

2Yr

Absolutely in with Vonovia! See potential, will also buy more. There was some panic recently because the portfolio was written off. But it's completely normal that financing costs become more expensive when interest rates rise and real estate prices fall. However, occupancy is at 97%, rents are rising because there are hardly any apartments with a rising population. Dividends are good at the moment. I think Vonovia is relatively safe for the next 15 years

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Dividendensammler@DividendensammIer

2Yr

I would prefer US stocks such as $O, in Germany you have enormous risks that are difficult to calculate due to the government. Depending on which way the wind blows, companies will find it more difficult or new laws will be introduced.

I am generally reducing my investments in Germany and want to have a maximum of 10% in my portfolio, as this country simply has poor prospects, especially with a left-wing green government and an effeminate society.

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Prdnce@Prdnce

2Yr

I clearly see potential for large landlords.
If interest rates go down again, property prices will rise again, especially as new construction is currently at rock bottom, the increased demand will clearly target existing properties, which will increase the value of real estate portfolios.
Rental prices only know one way and that is up. Demand is simply so high and new construction will not be able to absorb this in any way over the next few years.
All the government's regulations are annoying, but they are not a disaster. Smaller landlords and condominiums have much more to contend with, which tends to consolidate the position of large landlords.
People will always live and sooner or later the government will have to come up with a way to promote this.

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