Proactive Investors - Run By Investors For Investors

Retail 'survivors' to pile more pressure on Land Securities and peers, Liberum warns

Broker warns that the industry has yet to fully price the “rising bargaining power of stronger surviving retailers” such as Next
land securities
Land Securities shopping centres include One New Change in London

Forecasting a 25% downgrade in the value of assets owned by the retail property sector, Liberum downgraded its rating on Land Securities Group PLC (LON:LAND) and cut share price targets for two of its peers.

Cut from ‘buy’, LandSec thereby joined British Land Company PLC (LON:BLND) and Hammerson PLC (LON:HMSO) as a ‘hold’, while Intu Properties PLC (LON:INTU) remained a ‘sell’.

READ: Land Securities posts wider loss as tough retail market weighs on portfolio

Last week, FTSE 100-listed LandSec posted a £123mln annual loss before tax as the value of its assets fell 4.1% in aggregate over the year.

Retail asset value declines are being undermined across the sector by the many shopping chains calling in administrators or organising company voluntary arrangements where shops are shut and rents are cut.

“However, we believe the industry has yet to fully price the rising bargaining power of stronger surviving retailers,” Liberum said, noting high street giant Next’s analysis that its rents could need to fall by over 50% in coming years if sales continue to slip.

For the retail real estate investment trusts, the broker said this has prompted further NAV reductions across, calculating the three largest listed owners of UK retail property would like to sell around £3bn of assets in order to reduce exposures.

“Unfortunately there are few buyers at current valuations,” the analysts lamented.

LandSec’s share price target was cut to 950p from 1,000p, Hammerson’s was lowered to 300p from 390p and Intu’s to 85p from 100p. 

View full LAND profile View Profile

Land Securities Timeline

Related Articles

November 15 2018
“No properties inside the M25, with one or two minor exceptions,” says Richard Shepherd-Cross, managing director of the REIT's investment management arm
March 29 2019
Chief executive Joe McTaggart said the company has a strong pipeline of projects for 2019 that are expected to deliver “good results”.
February 08 2019
Belvoir has expanded its operations in mortgages to provide an alternative source of income

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use