PRET (Issue 64): EUROPE | Property & Real Estate

Research evidence excerpt

PRET (Issue 64): EUROPE | Property & Real Estate

p (-5%).

FY26: Now for the Heavy Lifting Work High yielding asset sales, rising financing costs, lower

capitalisation of interest and other cost pressures result in earnings downgrades for WKP,

with a FY26 DPS cut -12%. Short leases to sub-prime SMEs aren’t defensive, with the portfolio

devalued -7% & NAV -11%. Our DCF-derived PT is –4% to 406p, with the shares at a 52%

discount to NAV of 687p and 1yr Fwd DY of 6.2%. Our rec. is Buy given activist SABA 22%

shareholding and Nick Roditi owning 29%.

No FFO growth in sight despite active liability management Refinancing drag remains, with

perpetual note savings offset by higher bond coupons, squeezing the ICR further. Underlying

trends are uninspiring, with office vacancy creeping up. The GCP deal is financial engineering,

not genuine growth. With no FFO growth in sight, elevated leverage, & persistent office

headwinds, AT1's discount to NTA appears warranted. PT cut to €2.00. Jefferies EMEA Real Estate * | Equity

Research Team

€400m German disposals coming? According to GSNews, URW is in exclusive talks to sell | jefferiesemearealestate@jefferies.com

Minto to Trigea for c. €160m. Following the sale of Höfe am Brühl, Palais Vest and Gropius Mike Prew * | Equity Analyst

Passagen, URW keeps selling centres initially part of its JV with CPPIB in Germany. Paunsdorf 44 (0) 20 7029 8422 | mprew@jefferies.com

Center in Leipzig, the last centre of JV, is also for sale. Together with Minto, these two additional Pierre-Emmanuel Clouard, CFA ^ | Equity

disposals could be >€400m, bringing the total disposals in Germany for this year up to €650m. Analyst

+33 1 8665 6373 | pclouard@jefferies.com