Broker snap: Segro favoured by UBS

10th Dec 2009 10:40

UBS expects UK property companies to produce higher returns than European firms over the coming year, with Segro its favourite pick. The broker has upgraded the industrial property specialist from 'hold' to 'buy' and included it on its most preferred list.UK REITs could produce total returns of 10% to 12% and the Continental European REITs returns of 8% to 10%. The UK's outperformance is expected to be driven by the greater potential for UK property values to snapback following the 44% decline from June 2007.For the sector overall, in the short term UBS believes NAV momentum is sufficient to maintain current ratings, but this would be vulnerable if it slowed appreciably or alternative investments became more attractive.