FRANKFURT (dpa-AFX) - Real estate stocks in this country continued their recent recovery on Tuesday, and they were also in demand across Europe. Among other things, the hope of dividends paid again boosted the sector. In the process, LEG Immobilien moved to a high since last March at the top of the MDax after positive analyst opinions and was recently still up by more than three percent. For industry peers such as Vonovia or TAG Immobilien, it went up by up to almost three percent.

While Warburg analysts raised their price target for LEG slightly in response to the profit targets polished up by the Group's management last week, the experts at Berenberg Bank now see opportunities for shareholders to participate again. After the dividend for the past year had failed, the prospects for a distribution would rise again, wrote analyst Kai Klose.

In addition to LEG, other real estate groups had also cut dividends for 2022 or canceled them altogether, including Aroundtown and Grand City Properties. Their shares now rose by 5.4 and 4.2 percent, respectively.

The industry is groaning under the sharp rise in interest rates, rising construction costs and staff shortages and is therefore steaming up its heavily credit-financed projects. This development can also be seen in the stock market prices. The corresponding European sector index Stoxx 600 Europe Real Estate had lost half of its interim high of around 202 points in November 2021 within less than twelve months.

Only at the end of June, the barometer had fallen again to a low since October last year, but recently it switched to recovery mode. This upward course continued on Tuesday with about 1.8 percent, with which the real estate values took the lead across Europe. The minus since the beginning of the year is now still a good 8 percent.

Interest rates remain an important issue for real estate stocks. In the U.S., according to CMC Borsen analyst Michael Hewson, the weak price component of the manufacturing purchasing managers' indexes already released the previous day - and received as a disappointment by the market - pointed to easing inflationary pressures, "fueling hopes that a Fed rate hike in July could be the last before a prolonged pause."

Meanwhile, Ralf Umlauf of Landesbank Hessen Thüringen (Helaba) points out that interest rate expectations for the European Central Bank (ECB) have risen significantly in recent weeks, "although there have certainly been disappointments on the part of economic sentiment indicators."/tav/gl/men