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  "documentTitle": "A&M Valuation Insights November 2023",
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      "text": "The indexed market capitalization of the residential real estate companies declined significantly since the beginning of 2022.",
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      "text": "The indexed market capitalization of the residential real estate companies declined significantly since the beginning of 2022. This decline in market capitalization is strongly related to the decision of major central banks to rise key interest rates in order to curb burgeoning inflation. As a result, higher financing costs have a strong adverse effect on real estate companies, which must refinance their debt at much higher rates. At the same time, the strong inflation has led to higher property management costs, while rent increases due to non-indexed rental agreements are lagging behind.",
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      "text": "Naturally, the new interest rate environment is also having a strong negative impact on the stock market performance of German commercial real estate companies. The rise in interest rates that began in late 2021 has again led to severe decreases in the market capitalization of commercial real estate companies. In addition to the impact of higher borrowing costs on the profitability of the peer group companies, the economic situation of some commercial tenants, such as e.g. retail stores, has worsened.",
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      "text": "Source: S&P Capital IQ, A&M Analysis",
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