Goldman Sachs upgraded two European real estate companies ahead of FY25 results, citing improved outlooks and updated valuations. The bank raised Castellum to Buy from Neutral and Colonial Inmobiliaria to Neutral from Sell. Goldman now forecasts 2% EPS and 3% NTA growth for the sector in 2025, with acceleration expected in 2026.

The upgrade for Swedish firm Castellum reflects better macro conditions and a strategic shift post-management restructuring. Goldman now anticipates SEK 11 billion in disposals and SEK 4 billion in buybacks through 2027, with its EPS estimate 10% above Bloomberg consensus. The price target was lifted to 138 SEK, implying 28% upside.

For Colonial Inmobiliaria, the move to Neutral follows nine months of underperformance, with shares lagging 15%. The bank sees limited downside and about 3% upside, raising its target to €5.24. Goldman's average price target for its European real estate coverage is up 6%, driven by a refreshed macro backdrop.