伯恩斯坦-2026年房地产夏季指南 Property Real Estate：Real Estate Summer Guide 2026-260622

22June2026

Property/RealEstate

RealEstateSummerGuide2026

ValerieJacob

+442077624885

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MariosPastou

+442076766881

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NikitaTalwar

+442076768785

nikita.talwar@

SpecialistSales

SaraBellenda

+442077621867

sara.bellenda@

OurRealEstateSummerGuide2026isthenintheditionofourquarterlyreportaimedatdiscussingtopicalthemesaheadoftheupcomingearningsseason,bothatasectorandcompany-specificlevel.

OurstrongestOutperformconvictionsareCTP,URW,Aedifica,MerlinandLandsec.OurkeyUnderperformratingsareColonialandAroundtown.

WHATTOLOOKOUTFORINTHEUPCOMINGREPORTINGSEASON

Wehavedetailedourexpectationsfortheupcoming1H26earningsseasoninthisreportandhaveincludedacompany-by-companysummarytable.Weseeoperatingperformance,capitalallocation,strategicupdatesandassetvaluegrowthtrajectoriesinfocus.Thisyear,forthefirsttimesincewestartedpublishingthisguide,weseerisksforthreecompaniestodowngradetheirguidance,twoofwhichareonthebackofweakerpropertydevelopmentsaleslinkedtothemacroeconomicuncertainties.Weseesixcompanieslikelyincreasingguidance,mostlyfollowingacquisitionsorpreviousconservativeguidance.

FEEDBACK,PUSHBACK,TALKBACK

Overthepastfewmonths,wehavemetwithabroadrangeofinvestorsacrossmultiplejurisdictions.Retailremainsthefavouritesub-sectoratthemoment.Thesub-sectorhasoutperformedandcontinuestoscreenwell,albeitinvestorsareincreasinglyquestioningifitistimetotakeprofits.Consolidationandacquisitionsremainthetwomaintopicsdiscussedwithinvestors.ThedisconnectbetweenthesolidoperatingtrendsandthemacroheadwindsintheUKremainsakeytalkingpointinmeetingstoo.OccupiertrendsacrossEuropeanindustrial/logisticshavebeenahottopic,especiallyasthemajordevelopersinthisspacenowoffergoodentrypointsfollowingrecentweakness.Finally,weprovidefeedbackonColonial’sCMD,TAG’srecentre-IPOofitsPolishhousebuildingarmROBYG,andourMENAinitiations.

MARKETUNCERTAINTIESPERSIST-HOWTONAVIGATE?

Macroandpoliticaluncertaintiescontinuetoinfluencetheperformanceoftherealestatesector.Inthisreport,wediscusshowthevolatilityaroundtheongoingpeaceproposalsinIran,upcomingelectionsinBerlinandFrance,andUKpoliticscouldinfluencetheperformanceofEuropeanrealestate.

REALESTATECONFERENCE2026

Don’tmissoursecondRealEstate‘BackfromtheBeach’conference,takingplace10thSeptemberinLondonduringBernstein’sFlagshipStrategicDecisionsConference.Agenda®istrationlink.

SeetheDisclosureAppendixofthisreportforrequireddisclosures,analystcertificationsandotherimportantinformation.Alternatively,visitourGlobalResearchDisclosureWebsite.

FirstPublished:22Jun202607:15UTCCompletionDate:22Jun202607:15UTC

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INVESTMENTIMPLICATIONS

WethinktheEuropeanrealestatesectorrepresentsgoodvalue.Ourcoverageoffersa31%discounttoourFY26eEPRANTA(27%onalastreportedbasis,widercomparedtothelong-termaveragediscountofc.12%)anda7.9%FY26erecurringEPSyield(c.150bpaheadofthelong-termaverage),bothonaweightedaveragebasis(seeExhibit1andExhibit2).

BasedontheforwardearningsmultipleoftheSTOXX600,theEuropeanrealestatesectoriscurrentlyvaluedatan4%discountcomparedtothewidermarket.Theoncesignificantpremiumhasreversedandcomparestothec.24%long-termaveragepremiumvsthewidermarket(seeExhibit3).Ondividend,therealestatesectorcurrentlyoffersadiscounttothebroadermarket,widercomparedtoitslong-termaverage(seeExhibit4).

EXHIBIT1:Ourcoveragetradesata27%discounttolastEPRANTA,widervsthelong-termaverage

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

40%

30%

20%

10%

0%

-10%-20%-30%-40%

-50%

Prem/(disc)toNTA(%)(Bernsteincoverageaverage)

Prem/(disc)toNTALTaverage

Source:Companies,Bloomberg(to18June2026),Bernsteinanalysis

EXHIBIT3:Realestateisinlinewiththewidermarketonearnings

201220132014201520162017201820192020202120222023202420252026

STOXX600RealEstateSTOXX600

PEratio(basedonbestconsensusEPSestimatesFY+1)Dottedline=long-termaverage

35

30

25

20

15

10

5

EXHIBIT2:A7.9%FY26erecurringEPSyieldisaheadofthelong-termaverage

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

12%

10%

8%

6%

4%

2%

RecurringEPSyield(%)(Bernsteincoverageaverage)

RecurringEPSyield(%)LTAverage

Source:Companies,Bloomberg(to18June2026),Bernsteinanalysis

EXHIBIT4:Therealestatesectoroffersadividendyieldpremiumvsthewidermarket

5.5%Dividendyield%

Dottedline=10yraverage

5.0%

4.5%

4.0%

3.5%

3.0%

2.5%

2.0%

201220132014201520162017201820192020202120222023202420252026

STOXX600RealEstateSTOXX600

Source:Bloomberg(31May2026),Bernsteinanalysis

Source:Bloomberg(31May2026),Bernsteinanalysis

Wehaverefreshedourfinancialforecastsincertaininstances,reflectingrecentcompanyupdatesandmildchangestoourassumptions.ThisincludesShurgardwhereweshavedownourearningsassumptionsbyc.3%(onanEPSbasis)followingaweakstarttotheyear,nowthebottomendoftheguidancerangefor2026e.Thisisreflectedinourrevisedpricetargetof€28.5(from€31.0,alsoincludingtheadjustmentforthecompanynowtradingex-div).Wehavealsoadjustedourpricetargetsforcompanieswhicharenowtradingex-divsinceourlastupdate(theseincludeURW,Carmila,TAGImmobilien,CTP,Vonovia,Shurgard,LEG,Colonial,BritishLandandLandsec).Furtherdetailscanbefoundlaterinthisreportonacompany-by-companybasis.Ourratingsremainunchangedacrosstheboard.

URW(15May),Carmila(20May),TAGImmobilien(21May),CTP(22May),Vonovia(22May),Shurgard(25May),LEG(28May),Colonial(16June),BritishLand(18June)andLandsec(18June).

PROPERTY/REALESTATEBERNSTEINlsocIeTecENeRAlECROUP2

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Don’tmiss…

RealEstatesectorprimer:EuropeanListedRealEstate:Unlockingthedoor-Part1

Industrial/logisticssub-sectorprimer:RealEstate:Sheddinglightonindustrial/logistics-Part2Germanresidentialsub-sectorprimer:RealEstate:GermanResidential-LivingbytheRules-Part3

Retailsub-sectorprimer:RealEstate:Unpackingretail-Part4

RealEstateValuationSheet(updateddaily).SeeourProperty/RealEstatepagetoaccessourresearchandcompanymodels.

ValerieJacob+442077624885

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VALUATIONCOMPSTABLE

EXHIBIT5:BernsteinEuropeanrealestatevaluationtable

PTupside/downside

Prem/disc.lastNTA

Prem/disc.lastGAV

Prem/disc.FY26eNTA

EPSyieldFY26e1

DiviyieldFY26e2

Shareprice

Mcap(€bn)

Pricetarget

GAV(€bn)

Company

Rating

Fx

Office10.735.516%(49%)(29%)(50%)8.9%7.2%

Colonial(COL)

€

3.5

12.0

UP

5.6

5.6

(0%)

(42%)

(21%)

(44%)

6.1%

5.9%

Gecina(GFC)

€

5.6

15.7

OP

73.4

92.0

25%

(49%)

(33%)

(50%)

9.2%

7.6%

Icade(ICAD)

€

1.6

7.8

MP

20.6

24.0

17%

(61%)

(32%)

(61%)

14.5%

8.7%

Diversified28.076.520%(25%)(13%)(29%)7.1%5.3%

Aroundtown(AT1)

€

2.4

23.5

UP

2.3

2.5

7%

(71%)

(25%)

(72%)

11.1%

5.5%

BritishLand(BLND)

p

4.7

11.6

OP

401

490

22%

(32%)

(19%)

(34%)

7.7%

6.1%

Covivio(COV)

€

6.0

16.0

MP

53.7

64.0

19%

(35%)

(20%)

(39%)

9.3%

7.4%

Landsec(LAND)

p

5.4

12.5

OP

631

780

24%

(29%)

(17%)

(31%)

8.2%

6.5%

Merlin(MRL)

€

9.5

12.8

OP

15.3

18.6

22%

(0%)

(0%)

(8%)

3.7%

2.8%

Retail35.086.617%(10%)(5%)(16%)8.9%6.2%

Carmila(CARM)

€

2.3

6.2

MP

16.4

19.0

16%

(38%)

(23%)

(40%)

11.4%

8.5%

Eurocommercial(ECMPA)

€

1.5

4.1

MP

27.4

30.5

11%

(36%)

(21%)

(38%)

9.1%

6.9%

Klépierre(LI)

€

10.3

18.4

MP

35.9

38.5

7%

(0%)

(0%)

(8%)

7.8%

5.5%

Mercialys(MERY)

€

1.1

2.8

OP

11.7

14.5

24%

(31%)

(17%)

(34%)

11.2%

9.0%

NEPIRockcastle(NRP)

€

5.5

8.3

OP

7.7

9.1

18%

1%

1%

(5%)

8.4%

7.5%

URW(URW)

€

14.4

46.8

OP

99.5

122.0

23%

(12%)

(4%)

(19%)

9.3%

5.5%

Germanresidential25.6120.324%(55%)(27%)(57%)9.1%5.9%

GrandCity(GYC)

€

1.6

9.0

UP

9.2

10.0

8%

(64%)

(32%)

(66%)

11.1%

5.6%

LEG(LEG)

€

4.0

19.6

MP

53.3

66.5

25%

(61%)

(33%)

(63%)

12.1%

5.7%

TAG(TEG)

€

2.6

7.0

OP

13.6

17.8

31%

(35%)

(20%)

(40%)

7.5%

3.7%

Vonovia(VNA)

€

17.4

84.7

MP

20.5

25.5

24%

(56%)

(26%)

(58%)

8.5%

6.2%

Industrial/Logistics

26.9

51.5

25%

(18%)

(11%)

(22%)

5.9%

4.8%

CTP(CTP)

€

7.6

15.5

OP

15.5

21.0

35%

(26%)

(17%)

(32%)

6.6%

4.6%

Segro(SGRO)

p

11.6

21.9

OP

744

900

21%

(20%)

(13%)

(24%)

5.2%

4.4%

VGP(VGP)

€

2.5

5.6

OP

82.4

102.0

24%

(15%)

(7%)

(19%)

4.3%

4.5%

WDP(WDP)

€

5.2

8.5

MP

21.7

26.0

20%

(2%)

(1%)

(5%)

7.4%

5.9%

Healthcare

5.7

12.4

38%

(15%)

(8%)

(19%)

8.0%

6.2%

Aedifica(AED)

€

5.7

12.4

OP

68.0

94.0

38%

(15%)

(8%)

(19%)

8.0%

6.2%

Self-storage

2.4

6.7

18%

(55%)

(44%)

(57%)

7.0%

4.8%

Shurgard(SHUR)

€

2.4

6.7

MP

24.2

28.5

18%

(55%)

(44%)

(57%)

7.0%

4.8%

Total/weightedavg.3

134.5

389.5

21%

(27%)

(15%)

(31%)

7.9%

5.7%

Company

Fx

Mcap

(€bn)

Rating

Share

price

Price

target

PTupside/

downside

P/Blast

P/BFY26e

EPSyield

FY26e4

Diviyield

FY26e2

MENADevelopers

44.1

0%

1.42x

1.28x

12.7%

5.7%

Aldar

AED

16.8

MP

9.0

8.5

(6%)

1.74x

1.51x

10.9%

2.5%

Emaar

AED

27.3

MP

13.0

13.5

4%

1.22x

1.14x

13.9%

7.7%

Total/weightedavg.3

44.1

0%

1.42x

1.28x

12.7%

5.7%

1Earningsmetricsbasedonrecurring/adjustedEPRAEPS/FFOtoshareholders.2Dividendyieldiscalculatedusingthedividendreportedfortherelevantfinancialyear.3Market-capweighted.4BasedonreportedEPS.

OP-Outperform,MP-Market-Perform,UP-Underperform.

Source:Bloomberg(18June2026),Bernsteinestimatesandanalysis

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TableOfContents

Executivesummary 5

Ourtoppicks 7

Whattolookoutforintheupcomingreportingseason 8

Ahostofkeytopicstolookoutforacrossthemajorsub-sectorswecover 9

Ourcompany-by-companyguide 10

Serialguidanceupgraders 14

Shoppingcentres:shoppingspree 14

Assetvaluegrowth:recoveryhaltedbyinterestratevolatility 16

1H26earningscalendar 19

What'soninvestor’sminds?Feedback,Pushback,Talkback 19

Retail:Areallstarsstillaligned? 19

TheUK:howtoplayit? 20

ColonialCMD:amissedopportunity? 21

Industrial/logistics:Occupierresilience? 21

TAGImmobilien:pullingthetriggeronROBYG 22

FeedbackonourMENAinitiations 24

Aworldofuncertainties(still) 26

OngoingconflictintheMiddleEast-istheendreallyinsight? 26

Politicsandelections-pickyourcountry 27

Pricetargetandestimatechanges:Asummary 30

DETAILS

EXECUTIVESUMMARY

OurRealEstateSummerGuide2026isthenintheditionofourquarterlyreportaimedatdiscussingtopicalthemesaheadoftheupcomingearningsseason,bothatasectorandcompany-specificlevel.Thisguidefollowsasimilarformattoourpriorreports,mostrecentlyourSpringGuide2026.

Whattolookoutforintheupcomingreportingseason

24ofthe26companieswecoverwillreporthalf-yearresultsforthesixmonthended30June2026throughJuly/August2026(Aedificaistheonlyoutlier,reporting1stSeptember).ThisexcludesUKmajorsBritishLandandLandsecwhichhaveMarchyear-endsandtypicallydonotprovidedetailedupdatesoutsidethe1H/FYreportingcycles.Wehavesummarisedourexpectationsfortheupcoming1H26earningseasonbycompanywithsomefurthercolourprovidedthroughoutthereport.

Weseevarioushottopicsatbothasub-sectorandcompanylevelbeinginfocusaswemovethroughresultsseason.Thisincludesoperatingperformance,capitalallocation,strategicupdatesandassetvaluegrowthtrajectories.Inretail,thekeysurprisescouldcomeforcapitalactivityaswewouldexpectCarmilaandMercialystoannounceacquisitions,inlinewiththeirstatedambition.Inindustrial/logistics,weexpectthefocustoremainonthetrajectoryofoccupierdemandandhowthiscansupportthevariousdevelopment-ledexpansionplansofeachofthelandlords.Inoffice,weexpectresultstocontinuetoreflecttheongoingbifurcationtrends.InGermanresidential,weseethemostuncertaintiesatVonoviawhiledisposalswillbeinfocusforboth

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VonoviaandLEG.Weexpectassetvaluestobeunderscrutinyacrosstheboard.

The1HreportingseasonisanopportunityforcompaniestoupdatetheirFYguidance.Lastyear,11outof21companiesinoursampleupgradedtheirFYearningsguidance.Thisyear,forthefirsttimesincewestartedpublishingthisguide,weseerisksforthreecompaniestodowngradetheirguidance(Aldar,IcadeandShurgard),twoofwhichareonthebackofweakerpropertydevelopmentsaleslinkedtothemacroeconomicuncertainties.Onamorepositivenote,weseesixcompanieslikelyincreasingguidance:Aedifica,Carmila,Covivio,Eurocommercial,Klepierre,andMerlin.Someareserialrisers,whichtendtoguidetooconservativelyandsubsequentlyraise(e.g.Klepierre).Somecouldraiseonthebackofacquisitions(Eurocommercial,Carmila).WeexpectAedificawillupdateitsguidancewith1H26resultsandincludetheaccretiveCofinimmoacquisition.NotethatVonoviaandLEGwouldtypicallypointtotheupperendoftheirguidanceat1Hbutthisyearwedonotexpectanupgradeduetomacrouncertainties.

Feedback,Pushback,Talkback

Overthepastfewmonths,wehavemetwithabroadrangeofinvestorsacrossmultiplejurisdictions.Retailremainsthefavouritesub-sectoratthemoment.Thesub-sectorhasperformedwellandcontinuestoscreenwell(formoredetailsseeRealEstate:HowtobepositionedinlistedRetailRealEstate),althoughinvestorsareincreasinglyquestioningifitistimetotakeprofits.Consolidationandacquisitionsremainthetwomaintopicsdiscussedwithinvestors.ThedisconnectbetweenthesolidoperatingtrendsandthemacroheadwindsintheUKremainsakeytalkingpointinmeetingstoo.OccupiertrendsacrossEuropeanindustrial/logisticsremainahottopic,especiallyasthemajordevelopersinthisspacenowoffergoodentrypointsfollowingrecentweakness-demandresiliencewasconfirmedbyourrecentexpertwebinarswithbothSavillsandNewmarkforwhichweprovidefurtherdetailsinthisreport.Finally,weprovidefeedbackonColonial’sCMD,TAG’srecentre-IPOofitsPolishhousebuildingarmROBYG,andourMENAinitiations.

Aworldfullofuncertainties(still)

Macroandpoliticaluncertaintiescontinuetoinfluencetheperformanceoftherealestatesector.Inthisreport,wediscusshowthevolatilityaroundtheongoingpeaceproposalsinIran,upcomingelectionsinBerlinandFrance,andUKpoliticscouldinfluencetheperformanceofEuropeanrealestate.

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OURTOPPICKS

OURSECTORPOSITIONING

Overall,wecontinuetofeelthattherealestatesectoroffersgoodvaluenotwithstandingtherecentinterestratevolatilityandgeopolitics.Atthesub-sectorlevel,wecontinuetoseetheretailsectorasattractiveasittradesonattractiveearningsyieldsversusboththebroaderlistedrealestateuniverseanditsownhistory.Ouranalysisshowsthatlistedretailrealestatetendstooutperforminahigherrateenvironment.FormoredetailsseeRealEstate:HowtobepositionedinlistedRetailRealEstate.WerateURW,MercialysandNEPIRockcastleOutperform.Wealsoseevalueintheindustrial/logisticssectorwhererecentleasingdatahasbeensupportive.SeeourRealEstate:ExpertTake-SheddingfreshlightonEuropeanlogisticswithSavillsandourRealEstate:ExpertTake–UKUrbanLogisticsvsBigBoxwithNewmark.Inparticular,webelievethatthemajordevelopersCTPandVGPcanbenefit,bothofferingagoodentrypointfollowingrecentsharepriceweakness.CTPremainsourtoppickofthetwo.WealsolikeSegroasweseegoodmomentumonUKactivityacceleratingafterpriorleasingwasdrivenbyContinentalEurope,withamildreductioninUKurbanvacancylevelsthrough1Qprovidingfurtherscopeforastabilisationthroughtherestoftheyear.ElsewhereintheUK,wethinkthehighqualitydiversifiedexposuresofBritishLandandLandsecofferacompellinggrowthstory,withourmildpreferenceforLandsecgivenitscapitalrecyclingstrategyintomajorretailanear-termcatalyst.Seeourlatestnote,BritishLand&Landsec:aUKstoryofyieldsandgrowth.Inliving,weremaincautiousonGermanresidential,whichweseeasbondyieldproxy.Inahigherrateenvironment,weseelowerthanaveragereturnsforthissub-sector.FormoredetailsseeRealEstate:HowtobepositionedinGermanresidential.WeseethebusinessmodelofAedificaofferingasimilarlydefensiveexposuretopopulationmegatrendswithamoreattractivebusinessmodel.AsAIgrowthisbecomingmoreevidenteveryday,weprefertheDataCentreexposureofMerlinProperties(OP)whileweseerisksfortheofficemarketinthemediumterm.SeeRealEstate:ArtificialIntelligence...SoonerorLater-BricksMeetBytes,AI’sNewPropertyBlueprint.WewouldavoidColonialandAroundtownwhichofferanunattractiverisk/rewardinourview.

OURSTRONGESTOUTPERFORMCONVICTIONS

•CTP(OP,PT€21.0)-Strongestrisk/reward.SharepriceweaknessoverthelastfewmonthsisreflectiveofasofterFY25resultandheightenedgeopoliticaluncertaintyfollowingtheMiddleEastconflictshortlythereafter.Industrial/logisticsdevelopershavebeenimpactedbyconcernsthatconstructioncostinflationcoulderodedevelopmentmarginsandthatdemandmaysoftenamidincreasedmarketuncertaintyandaweakergrowthoutlook.However,neitherriskhasmaterialisedtodateanddoesn’tappeartobeimpactingacrosstheboard.CTP’s1Qresultsconfirmedthatoccupierdemandremainsrobustandweexpectthistrendwillcontinuethrough2Q,especiallyasgeopoliticaluncertaintiesslowlyfade.Whileexecutionriskincreasesasmanagementpursuesexpansion,weremainpositiveonthevalue-creationopportunityembeddedwithinCTP’sdominantindustrial/logisticsdevelopmentpipeline.Inourview,thesector-leadingreturnsonofferarenotfullyreflectedinthecurrentvaluation,presentinganattractiveentrypoint.

•AEDIFICA(OP,PT€94.0)-Thedefensivecompounder.AedificaisourfavourednameinthelivingsectorasweseethebusinessmodelmoresuitedtohigherbondyieldsthanlivingalternativeswithlowerinitialyieldssuchasGermanresidentialnames.Growthinearningsintheshort-termwillbeboostedbysynergiesposttheCofinimmomergerbutpenalizedbyrefinancingin2028.Weseethegroupofferinganattractiverisk/returnwithexposuretoamarketpoisedforgrowth.Webelievethatthecombinedportfolioshouldprovideanenlargedplatform,whichtogetherwithimprovedcreditmetricsshouldallowAedificatoresumeitsgrowthstrategy.Thegroupisinauniquepositiontocontinuetoconsolidatethehealthcarerealestatemarketandcapturesynergiesthankstoitssizeanddeepexpertise.FormoredetailsseeAedifica:Aplatformforgrowth.

•URW(OP,PT€122)-Shoppingthebrand.URW’sstrong1Q26performance(seeURW:Strong1Q26)reinforcesourconvictionthatthegroupcandeliveronits2028targets,supportingfurthersharepricere-rating.The€49bnportfolioofprimeshoppingcentresinleadingglobalcitiesunderpinsrentalgrowthaboveinflation,drivenbyassetquality,activemanagementandconsistentlyoutperformingtenantsales.SincetheWestfieldacquisition,URWhasdiversifiedrevenuesthroughinitiativessuchasWestfieldRiseandbrandlicensing,togetherexpectedtocontributec.8%ofEBITDAby2028.Ongoingdisposalsanddisciplinedcapitalexpenditurecontinuetode-riskthebalancesheet,withLTVprojectedtodeclineto37%(IFRS)by2028,furtherstrengtheningthebalancesheetandlong-termgrowthcapacity.Formoredetails,seeURW:BestIdea1Q26.

•MERLINPROPERTIES(OP,PT€18.6)-TheDataCentreplayinEuropeanRealEstate.MerlinofferscompellinggrowthpotentialleveragedtoAI-drivenDataCentredemand.Solidperformanceacrossthegroup’sexistingandmoretraditionalrealestateportfolioprovidesastablebaseasMerlinacceleratesitstransformationintoaleadingDCowner-operator,targetingc.1GWofcapacityinstrategicIberianlocations.Weseethedevelopmentpipelineofferingattractivereturns,whicharelargely

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notreflectedinthecurrentsharepriceonourestimates,withMerlinwellpositionedtocontinuebenefitingfromitsfirst-moveradvantageinthisspace.Forfurtherdetails,seeMerlinProperties:AI-readybydesign;reiterateOutperform.

•LANDSEC(OP,PT780p)-Majoringongrowth.Landsec’sdiversifiedportfoliocombineshighqualityLondonofficeswithmajorretaildestinationsacrosstheUK.Latestresults(toMarch2026)pointedtosolidoperatingmomentumandnosignsofaslowdown,supportedbycontinuedstrengthintenantdemand.Landsec’smanagementseesacompellingopportunitytoredeploycapitalintodominant,highcatchmentshoppingcentresatattractivereturns.Thestrategytargetsyieldsoncostofroughly7-8%frommajorretailacquisitionsandaround10%fromretail-focusedcapexwithintheexistingportfolio.Managementisaimingtoinvestc.£1bnoverthenextfewyearsfundedviadisposalsofLondonofficesandnon-coreordevelopmentproperties,aprocessthatisalreadywellunderway.Combinedwithsolidlike-for-likerentalgrowthandleasingthedevelopmentpipeline,LandseccandeliveranEPSCAGRofc.5%throughtoFY29/30.Onthatbasis,weseethe2026eNTAdiscountof32%asattractive.Formoredetails,seeBritishLand&Landsec:aUKstoryofyieldsandgrowth.

OURKEYUNDERPERFORMS

•COLONIAL(UP,PT€5.6)-Weseethecurrentrisk/rewardasunattractive.Indeed,despiteofferinghigherthanpeersearningsgrowthandanattractivediscounttoNTA,Colonialsharesdonotscreenattractiveonarisk/rewardbasis.Onourestimates,weseeEPRALTVat44.5%in2028,oneofthehighestinourcoverage.Infact,Colonialstandsoutwithleveragenotreducingsignificantlyonourestimates.WhileweseeEPRALTVremainingwithinthecovenants,webelievethatthegroup’sriskierbalancesheetofferslessprotectioninacaseofanassetvaluedeclinecycleandshouldbereflectedinahigherriskpremiuminitssharevaluation.OthercompanieswithsimilarorevenhigherEPRALTVornetdebttoEBITDAtradewithahighriskpremiumandarelargelyexplicitlycommittedtofurtherdeleveraging.SeeColonial:Highergrowthatacost.

•AROUNDTOWN(UP,PT€2.5)-