Contents
3 Sector anatomy – presentation of the sector
3 Key macro-economic drivers
4 Sector anatomy – performance and valuation
4 Focus on two main changes foreseen in the industry
5 Sector – leading indicators
6 Investment summary
6 Sector driven by hope of rebound
6 Economic cycles drive credit spreads
7 Credit spreads are still tightening
8 Cost of capital stable in Europe lower in the UK
8 Consequences for ratings and target prices
10 Central and normalised sector cost of equity
11 Theme and key trends
11 Overweight
11 Underweight
12 Valuation
12 Key assumptions and restatements
13 Valuation methodology
14 Fair values up 19%: cont. Europe up 15% and UK up 27%
20 Sensitivity
20 Valuation sensitivity
21 Alternative Bull and Bear scenarios
23 Normalised cost of equity (normalised scenario)
27 Change in ratings
29 Real estate stocks: financial position
30 Loan to value ratio and covenant
30 Interest cover ratio and covenant
31 Next events