FRANKFURT (dpa-AFX) - A buy recommendation for Grand City Properties caused the shares of the real estate group to temporarily break out of their month-long sideways movement to the upside on Tuesday. With a peak of 8.275 euros, they reached the highest price since mid-March and thus almost the lower area of the price gap that had arisen at that time, which they were thus not yet able to close.

However, the 200-day line, which is a highly regarded indicator of the long-term price trend among chart technicians and currently stands at 8.37 euros, then acted as resistance. Of a ten percent peak increase, a gain of 5.5 percent remained. At the top of the friendly trending second-tier index SDax, the shares most recently cost 7.93 euros. As in the two previous months, the round mark of 8 euros was once again too hard a nut to crack for the stock.

Since the beginning of the year, the share price has fallen by almost 14 percent, due to the interest rate hikes by the central banks, under which the real estate companies are suffering because they are making the financing of residential property more expensive and thus slowing down demand. In addition, many companies have had to reduce the portfolio values on their balance sheets, which rose sharply during the years of zero interest rates.

In the sector as a whole, meanwhile, hopes are holding out that the interest rate peak is imminent or has already been reached. Within a week, the European index for the real estate groups has gained significantly. On Tuesday, it recently gained another 0.6 percent.

At Grand City, analyst Jonathan Kownator of Goldman Sachs now sees opportunities after the first half. He upgraded the shares from "Neutral" to "Buy" as part of an update of his sector estimates, with a price target raised from 7.50 to 8.80 euros. He cited four reasons at once: Supply and demand dynamics with a low vacancy rate in residential real estate, operational progress, manageable debt and the attractive valuation of the securities.

In his study, Kownator generally advised investors in the real estate sector to buy value stocks, i.e. securities with attractive value potential, which in Germany includes not only Grand City Properties but also Vonovia 's Dax-listed shares. Vonovia is also on Goldman Sachs' "Conviction Buy List", a list of particularly convincing buy recommendations.

On Tuesday, Vonovia initially made strong gains, but then the price increase melted away somewhat to half a percent at the end of the day. This meant that the shares of the Dax group more or less followed the performance of the European real estate sector index./ajx/tih/mis