BUZZ-European retail property: Downside risks prevail, MS says

** Morgan Stanley says that capital values for continental European shopping centres are overdue a material correction and cuts PTs of 4 companies in the sector by 24% on average

** As online channels are set to gain more share via redistribution of total retail sales, rental growth for physical retail will be facing material retail property re-pricing, the brokerage says

** Assuming continental European market rents stay flat from here, there's a risk they could lower LFL rental growth by almost 3 percentage points to 0.9% annually, MS warns, estimating this would lower capital values

** "Downside risks continue to outweigh potential for a positive surprise," MS adds

** MS cuts PTs of Carmila by 22% to EUR 14, Klepierre by 20% to EUR 23, Hammerson by 33% to 280p and Unibail by 17% to EUR 115

** Out of the 4, Unibail should be most resilient as it has optimised its portfolio more than any of its peers, brokerage says