LONDON (ShareCast) - (Sharecast News) - Shore Capital has upgraded British Land and Derwent London to 'buy' in its latest review of the UK real estate sector.
The broker said London's West End office market now looked "poised for a recovery in both rental values and asset prices, helped by strengthening occupier demand, a supply of high quality new development, reimagined sci-tech space and stabilising yields".

It continued: "Let's be honest, office real estate has been a loveless place since the pandemic, hit by a barrage of blows from changing working practices, higher sustainability requirements and the rocketing cost of debt.

"And while central London has had it tough, regional offices have taken a proper pasting, with the market now increasingly polarised for public real estate investment trusts between investable and non-investable assets.

"However, the fortunes now look to be changing in London's West End, a unique marketplace with a truly global demand.

"We believe that British Land and Derwent look to be the best-placed listed operators to benefit.

"We like Derwent's award-wining, design-led development pipeline north of Oxford Street and believe Regent's Place will be a game changer for British Land. We think both stocks look good value and are now well-positioned to out-perform and upgrade to 'buy'."

Shore Cap previously had 'hold' ratings on both FTSE 250 stocks.

As at 1100 GMT, shares in British Land were up nearly 2% at 371.8p, while Derwent's stock was 3% higher at 2,114p.

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