Shares in London-based office specialist Workspace PLC (LON:WKP) dipped lower after a downgrade to ‘sell’ from 'hold' by Berenberg.
“Shares are now expensive,” said the German investment bank, as it warned that the company operates in a highly cyclical sub-sector that has gained interest recently because of “wider market uncertainty” with tenants unwilling to commit to new space on a long-term basis.
Nevertheless, Berenberg upped its target price from 925p to 950p and said that “reduced competition” from the likes of WeWork led it to increase outer-year earnings estimates slightly.
The property group, which rents out flexible freehold office spaces, was re-rated by investors after an upbeat set of interim results on Wednesday revealed growing customer enquiries and conversion to monthly lettings.
READ: Flexible boost for Workspace as property values increase
A 10% half-year dividend hike underlined its confidence as net assets rose 2.2% to £2.7bn.
Shares in Workspace were down 3% at 1,068p in Friday trading.