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‘Declining’ UK economy to hit British Land’s performance, says HSBC

Analyst Stephen Bramley-Jackson has downgraded the property developer to ‘hold’ and lowered his price target too
meadowhall shopping centre sheffield
Meadowhall shopping centre in Sheffield is one of the largest properties in British Land's portfolio

UK property developer British Land Company PLC (LON:BLND) was one of the biggest losers on the FTSE 100 this morning after it was downgraded by HSBC.

Analysts at the bank are expecting a “sound, but low return [first half]” of the group’s current fiscal year but think the uncertainty surrounding the UK economy at the moment are still likely to affect business to some extent.

“The large UK-proxy property companies are particularly prone to UK-centric economic and political events, which has evidently left them devoid of any re-rating impetus, underscored by a declining UK GDP growth trajectory,” wrote analyst Stephen Bramley-Jackson in a note to clients.

“As a result, we downgrade to ‘hold’ from ‘buy’ until there is more discernible directional evidence.”

Bramley-Jackson also said that diminishing accounting returns – they’ve dropped by almost 90% in the past three years – are “likely to entrench” the price-to-book discount for the foreseeable future.

On top of the downgrade to ‘hold’, the analyst also chopped his price target to 678p (from 738p).

British Land shares were down 1.6% to 603.5p in early deals on Monday.

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