Top Trading Ideas: long Corio NV / short Unibail-Rodamco
We recommend going long Corio NV (CORA NA) / short Unibail Rodamco (UL NA), two of the largest European commercial property REITs, and thus arbitraging the rental income yield (RIY) differential between the two companies. Corio has a RIY of 7.8% compared to Unibail's 5.1% (see our latest IRS Europe Real Estate report for details). Moreover the trade as a 2% dividend positive carry. The recent price dislocation between the two presents a long/short opportunity in this highly mean reverting pair trade.
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