Morgan Stanley (NYSE:MS) upgraded its view on European real estate and UK property developers in particular, seeing confidence returning to a sector where "balance sheets are healthy and assets have been marked down".
Analysts at the investment bank upgraded their stance on the wider European property sector and said they were now "unequivocally bullish" on UK real estate investment trusts.
This follows a "lost decade" for UK property, which struggled in the face of falling values due to pandemic shifts and a weak post-Brexit economy, with higher interest rates also piling pressure on many debt-laden companies.
After last month saw the Bank of England make its first interest rate-cut since the pandemic, the Morgan Stanley (NYSE:MS) team pointed to signs that UK REITs may be entering the next cycle: equity fundraises, dealmaking and improving operational performance.
The FTSE 350 REITs index is roughly flat so far in 2024, down by almost a third from pre-pandemic levels in early 2020.