MS turns more positive on property sector, prefers UK over continental Europe
** Morgan Stanley expects European property firms to face better times soon and raises its industry view to "attractive" as further rate cuts, lower long-term rates and stabilising asset values provide a compelling backdrop
** After a "lost decade" for the British real estate, "stars are aligning" as confidence is returning, balance sheets are healthy and assets have been marked down, MS says
** It sees a likely slower recovery in continental Europe where high leverage leaves less room for value creation
** Its top picks are British Land BLND.L and Segro SGRO.L; it removes Unibail URW.PA from the top pick list
** MS raises Spain's Colonial COL.MC to "equal-weight" from "underweight" saying the shares screen fairly valued for its return profile
** It cuts Switzerland's PSP PSPN.S to "underweight" from "equal-weight" and says it does not consider it a "great stock" due to its defensive characteristics
** MS warns that a broader recession would likely accelerate rate cuts but affect demand, driving certain sub-sectors such as German residential to outperform more demand-sensitive peers
Reporting by Matteo Allievi
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