European real estate equities open 2026 with valuations that Jefferies describes as the widest discount to the broader equity market in more than ten years, according to the firm s sector review. The research house says an environment of easing refinancing strain and more stable earnings is prompting investors to move from broad market positioning into more selective plays and preferred names within the sector.
Jefferies recommended names span multiple property types, with the brokerage highlighting fundamentals, strategic footprints and relative value as criteria for selection. Below are the firms the broker identified as top picks in each sub-sector and the rationale Jefferies set out for each.
- Logistics - CTP: Jefferies upgraded CTP to a "buy" after a material re-rating, pointing to sector-leading earnings growth and the company's pan-European presence as reasons supporting the call.
- Retail - Kl e9pierre: Kl e9pierre is favoured for retail exposure. Jefferies emphasised resilient consumer spending, exposure to destination shopping centres and generally discounted valuations across retail real estate.
- Retail - Unibail-Rodamco-Westfield (URW): URW is included among Jefferies' retail preferences, with the broker arguing that large, high-quality shopping centre platforms stand to gain as market sentiment improves and balance sheets are repaired.
- Residential - LEG Immobilien: In residential, Jefferies flagged LEG Immobilien, citing housing shortages, steady occupancy levels and the sector's attractive valuations as supportive factors heading into 2026.
- Residential - TAG Immobilien: TAG is named as another preferred residential stock, with Jefferies pointing to better balance sheets and stable earnings profiles across listed housing companies.
- Office - Gecina: For office exposure, Jefferies highlighted Gecina, noting its concentration in prime central business district assets at a time when secondary office space faces heightened vacancy risk.
- Self-storage - Safestore: Safestore received an upgrade to "buy" from Jefferies, with the brokerage citing early indicators of operational recovery after a period of vacancy pressure and elevated development spending.
- Self-storage - Shurgard: Shurgard is also on Jefferies' short list for storage, which the firm says is entering a new growth phase supported by strong balance sheet metrics and improving same-store performance.
- Data centres - Merlin Properties: Merlin is Jefferies' preferred way to gain data centre exposure in Europe, where the broker believes supply-demand imbalances are pushing rents to historically high levels.
- Student housing - Xior: In the alternative space, Xior is highlighted as a preferred student housing name, with Jefferies describing demand fundamentals as supportive for the segment.
Jefferies overall thesis is that the combination of reduced refinancing stress and stabilising earnings allows investors to be more discriminating across property types and to prioritise companies with clearer earnings trajectories, stronger balance sheets or discounted valuations.
Implications for markets - The broker's guidance implies potential sector rotation within real estate equities, with attention shifting toward companies that combine quality assets, resilient cash flows and balance sheet repair. Investors and portfolio managers focusing on real estate exposure may weigh these names relative to broader market discounts.