Nomura Real Estate downgraded its view on UK listed property companies to "Neutral" from a "Bullish" recommendation.
Analyst Mike Prew writes in is report Paper chase: Sector downgraded to Neutral that REIT shares have recovered sharply since their March lows - by about 60% - and now trade around the level of his top-of-the-market 2010 net asset value estimates.
"Until capital growth is re-established, we believe REITs need to earn their keep with high cash returns, long leases and durable tenant mix," says Prew.
"The sector no longer appears inexpensive to us, and with no visible re-rating catalyst, we have repealed our contrarian Bullish recommendation."
Looking a specific companies, Prew downgraded Hammerson to Neutral, Liberty International to Reduce and Derwent London to Neutral.
In the short term at least, Nomura seems to be at odds with the market - the FTSE Real Estate 350 is up a huge 4.2% today, with Land Securities and British Land both up 6.7%. Its going to be a bumpy ride for a while yet.