German property assets move higher, despite rise in shorting
Markit Securities says yield seeking investors are driving Germany property higher, even as shorting increases for some names in the sector
The average year to date return across 11 property companies on the DAX, MDAX and SDAX indices is 25% – in line with the overall Germany market, Markit said
In the meantime, the value of the capital base of these companies has gone up faster, up 43% over the same period.
However, this has been matched with a rise in the level of stock on loan, which is up 40% over the past nine months, predominantly focused on two of the 11 companies: TAB Immobilien and IVG Immobilien have 9% and 7% of their shares out on loan respectively.
Elsewhere, the picture is better, with expectations that dividends will increase this year. Deutsche Wohnen has set itself the target of becoming the country’s biggest residential property companies, while committing to a dividend policy of paying out 50% of funds from operations.
Markit said that the industry should also find support from the market for German asset backed loans, which is a key source of funding for the industry.
The price of German Commercial Mortgage Backed Securities are up 12% so far this year, while yields have fallen as investors have bought into perceived safety offered by the asset class.