Citi upgrades Segro to ‘buy’ from ‘neutral’

Citi upgraded Segro on Monday to ‘buy’ from ‘neutral’, saying it estimates that as rates decline, the risk to its previous estimates of deep recession rent declines reverses and it now expects growth.

"Combined with lower debt and bond yield forecasts, our estimates of a circa 20% decline in asset value reverses to circa 15% growth, significantly increasing our forward net asset value estimates," the bank said.

"Downside risk in the real estate sector has eased but has not been eliminated so our upgrade of Segro is a cautions way to increase investment risk in the real estate sector, while offering downside protection should conditions deteriorate back towards our deeper recession view."

At 0935 GMT, the shares were up 2.3% at 847.40p.