Swedish offices vulnerable in European real estate, says Jefferies
** Jefferies sees better protection in European real estate outside of Swedish offices as the local market pattern adds headwinds to earnings growth
** Says lease contracts are much shorter in Sweden (3 years) than in other European countries (5 in Spain, 9-10 in France, Germany) making rents more vulnerable in an economic downturn
** Notes that shorter leases also increase the risk of higher vacancy, with Castellum CAST.ST and Fabege FABG.ST recording HI vacancy rates at +150bp and +100bp, respectively
** Jefferies starts Castellum with "underperform" and Fabege with "hold", estimating an EPRA EPS CAGR of -0.7% and -3.1%, respectively, over 2023-26
** Starts Cibus CIBUS.ST with "hold", expecting flattish EPRA EPS in next 3 years on higher financial expenses, 2023 capital increase
** Upgrades Colonial COL.MC to "buy", citing "sustainable strong operations and lower leverage"
Reporting by Matteo Allievi
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