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Property bargain hunters eye Euro opportunities

Thursday, March 29, 2012

The growing value in European property was underlined after the biggest US real estate investment trust (Reit), Simon Property Group, completed its acquisition of a 28.7% stake in Klépierre, a French property company, for an estimated $2 billion (£1.2 billion).

Simon Property paid a 20% premium for the equity from the French bank BNP Paribas, which owned around a quarter of the Paris-based Reit.

The deal highlights a number of reasons why listed European property companies have become an increasingly attractive proposal for the world's biggest investors.

‘It is interesting that the most respected property company in the world has identified value in European Reits. Even though Simon Property bought it at a premium, it still paid a 10% discount for the underlying asset values,' said Alex Ross, fund manager at Premier Funds.

‘Today, there is no better opportunity to pick up quoted European real estate stocks because they are trading at discounts to underlying value of 10% to 30%. You are not just buying assets at a good discount, you are buying the best assets.'

Source: Citywire

 

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