First Berlin – GRAND CITY Properties S.A. Research Update (06/06/2019)

First Berlin Equity Research has published a research update on GRAND CITY Properties S.A. (ISIN: LU0775917882). Analyst Ellis Acklin reiterated his BUY rating and maintained his EUR 28.00 price target.

The Berlin residential market has been the focus of a tenant uproar and media frenzy the last months, due to soaring rents. This includes a tenant initiative calling for large landlords to sell their Berlin portfolios to the city. While we have disregarded expropriation as a highly unlikely scenario, the Berlin senate has now responded to public pressure with a five year rent freeze proposal. German property stocks are down in early trading on renewed regulatory jitters. While we see marginal operational risk to Grand City, we expect sector sentiment to suffer until there is more clarity on the proposal and its ultimate impact. Our Buy rating and €28 price target remain unchanged.