UBS analysts have backed real estate stocks like Segro and British Land after the sector has managed to hold out during the global stock exchange crash caused by the US trade war.
Since the start of 2025, global stock markets have tanked, spurred on by the introduction of sweeping tariffs by US president Donald Trump.
However, since real estate firms is neither a major exporters or importers, and may actually benefit from lower growth and higher inflation, UBS analysts have argued the sector is well-placed during the incoming trade war.
While the real estate sector was hit hard by the news around tariffs over the last month, falling 6.5 per cent, this is still 3.4 per cent higher than all global equities.
In the UK, the real estate sector has dropped just 0.5 per cent over the last month, outperforming the global real estate sector by six per cent, and the wider UK market, noted UBS analysts.
But prices are still cheap compared to historical averages: UBS calculations of the fundamentals compared to history rated UK real estate a ‘Strong Buy,’ compared to ‘Weak Sell or Neutral’ for US real estate.
Recently, the bank’s analysts upgraded UK real estate giant Segro to a Buy with a price target of 875p, 25 per cent above its current share price.
UBS analyst Charles Boissier cited the firm’s emphasis on data centres that has been “undervalued by the market,” along with strong private market sentiment towards logistics.
“Last week we hosted an expert call on data centres, where they mentioned that due to the significant power constraints in Slough and Park Royal hyperscalers may consider pre-lets, despite this not being their preferred route to increase capacity,” noted Boissier.
UBS also backed real estate investment trust British Land, as shares trade 36 per cent below net tangible assets, which analysts said could close as sentiment recovers around London offices and retail parks.