LONDON (ShareCast) - British Land was providing a drag in the real estate investment sector on Wednesday despite saying it had made a ‘good’ start to the year.

The share price was down 1.54% at 607.5p in afternoon trade as investors shrugged off the firm’s upbeat comments about a steadily improving economy and signs of returning confidence in the investment market. It also announced a 2.3% year-on-year increase in the quarterly dividend to 6.75p per share.

The company, which has a market capitalisation of over £6.0bn, said: “We have had a good start to our financial year operationally and strategically, delivering from our existing portfolio and enhancing our future growth prospects through acquisitions and developments.”

Panmure Gordon said that the statement demonstrated “continued positive progress in our opinion” and that British Land offers investors the exposure to a very good quality portfolio of real estate assets in largely prime locations.

However, while the stock is an “ideal yield play” – with a yield of 4.4% - the broker said that the current share price leaves little upside to its 630p target, which means that the stock is labelled a ‘hold’.

Investec meanwhile maintained its 600p target and kept a ‘reduce’ rating, but admitted that management had made a “very positive statement about confidence in their business”.

West End-focused property firm Shaftesbury was in the red, extending losses from Tuesday after its third-quarter trading update. The market also gave a rather cool reaction to the firm reporting healthy demand for its commercial and residential space, high occupancy and further rental growth.

Derwent London, Hammerson, Intu Properties, Land Securities, Great Portland and Segro were also out of favour today.

One stock bucking the trend was self-storage group Big Yellow which was making gains after Jefferies initiated coverage of the stock with a ‘buy’ and 489p target price, which represents decent upside to yesterday’s closing price of 423.7p.

The broker highlighted the recovery in the UK housing market (due to government stimulus measures) and declining unemployment, two things highly correlated with self-storage demand. “BYG is the leading brand in the industry concentrated in London which is set to maintain its outperformance,” Jefferies said.


Top performing sectors so far today
Electricity 10,214.49 +1.65%
Travel & Leisure 6,743.42 +1.51%
General Retailers 2,623.12 +1.06%
Industrial Transportation 2,954.60 +1.04%
Forestry & Paper 9,974.28 +0.87%

Bottom performing sectors so far today
Real Estate Investment Trusts 2,480.15 -1.11%
Software & Computer Services 1,166.98 -0.61%
Insurance (non-life) 1,802.49 -0.34%
Fixed Line Telecommunications 3,872.95 -0.31%
Beverages 14,854.20 -0.24%

BC

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