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.