Investing.com — Goldman Sachs upgraded logistics and data centre specialist to Buy and downgraded Swedish property company to Neutral following a review of first-quarter results across European real estate.
The bank upgraded Segro from Neutral to Buy and raised its price target to 900 from 800 pence. Goldman said it now expects better demand than first-quarter trends suggested, citing Asian and food retailers as sources of incremental activity, while rising rates had weighed on the shares and created a more attractive entry point.
Meanwhile, Castellum was cut to Neutral from Buy after outperforming Goldman’s European real estate coverage by roughly 20% since January 22, a run the bank attributed to corporate actions including disposals close to book value and share buybacks.
“Castellum’s shares have outperformed our U.K. and European real estate coverage by c.21.5% YTD, and we now see 16% potential upside to our revised 12-month price target of Skr146 vs. 19% average upside for our coverage,” analysts led by Jonathan Kownator wrote.
More broadly, the analysts struck a constructive tone on the sector despite meaningful investor concerns. The team argued that debates around AI disrupting offices, consumer weakness hurting retail, and regulation making residential uninvestable are all focused on demand, and are overlooking an equally important supply dynamic.
“Higher construction costs, funding costs and regulation are driving a rapid collapse in new supply,” the analysts said, giving pricing power to well-positioned landlords.
On the valuations front, they flagged European real estate is “the cheapest vs. its history by some margin” relative to the broader market, with correlations to real rates breaking down.
Goldman forecasts average 2026 earnings growth of around 2% for its coverage — low relative to other sectors — accelerating to 6% in 2027, alongside a dividend yield of 5.5%.
The bank’s clearest conviction sits in logistics and data centres, where it holds Buy ratings across all exposed names: , , , and Segro.
Analysts also highlighted as a top pick, particularly in a falling rates scenario, and flagged and as beneficiaries of retail resilience driven by a lack of new supply.
On the other side, Goldman maintained Sell ratings on Nordic and secondary office names including , and , as well as self-storage group .