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FRANKFURT (dpa-AFX Broker) - With the exception of Aroundtown, real estate stocks benefited from the first inflation data from Germany on Wednesday. In addition, there was renewed optimism that key interest rates in the USA would soon fall, which also boosted the real estate sector across Europe. The sector is suffering in particular from the sharp rise in interest rates as a result of the fight against inflation.

The Stoxx Europe Real Estate, one of the most popular European sub-indices, rose by 1.7 percent to 121.44 points. The recovery even carried it back to a high from March at times.

Among the individual stocks, Vonovia rose by 2.4 percent and LEG gained 2.9 percent. Both are now up a good 18% for 2023, having initially lost 25% and 30% respectively over the course of the year.

In the SDax, Grand City Properties gained 1.4%, while Aroundtown was punished by investors after disappointing new monthly figures. They lost up to 11 percent at the end of the SDax. In the course of the year, however, they turned upwards again at the 50-day line in view of the strength of the sector, and finally fell by 3.0%. The share's year-to-date gain thus amounts to just over two percent. The commercial real estate specialist was in the red due to the weak environment.

Among the European stocks, British Land and Derwent London, among others, rose by 2.5 percent and 1.9 percent respectively. Rightmove rose by 2.3 percent. In Paris, Unibail-Rodamco-Westfield gained 2.9 per cent and Covivio 1.8 per cent, while real estate shares from Switzerland also recorded gains.

Share prices benefited above all from the fact that Christopher Waller, a member of the Fed's Board of Governors, encouraged investors in their monetary policy optimism. "We will still be listening to Fed President Jerome Powell's words on Friday. But after Waller's speech, investors see their expectations confirmed that the next step will be a turnaround in monetary policy," said chief market analyst Jochen Stanzl from CMC Markets. The market is now expecting four small interest rate cuts in the USA in 2024.

Initial price data from Germany supported the positive sentiment. Inflation weakened noticeably in several federal states. This also indicates that inflationary pressure is easing throughout Germany. Inflation data from the eurozone and the USA are due on Thursday. The main focus will be on the Fed's preferred inflation indicator, the PCE.

While Deutsche Bank expects price pressure to remain the same, experts at Commerzbank expect it to ease. However, even then inflation will probably still be well above the Fed's target of two percent.

Meanwhile, Baader Bank analyst Andre Remke commented on Aroundtown that the Group's operating result (FFO) was somewhat weaker than he had expected. Analyst Charles Boissier from UBS also pointed out that the management had adopted a cautious tone for the further development of the commercial real estate market./ck/tav/jha/

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