British Land Company PLC (LON:BLND), Land Securities Group PLC (LON:LAND) and Big Yellow Group PLC (LON:BYG) all rose on Friday, each boosted by upgrades in rating by Goldman Sachs to ‘buy’ from ‘neutral’.
In a review of the European real estate sector, analysts at US investment bank said they based the change on expectations of lower cost of capital in the UK. Conversely, the analysts also downgraded a number of European sector names based on outperformance and a weaker outlook, notably in France
READ: British Land losses widen due to retail struggles
“For British Land and Landsec, we forecast significantly higher rental growth from completing developments,” the Goldman analysts said. “Both landlords remain focused on pivoting the business towards a London-based/office-led campus portfolio mix over a five-year period.”
British Land's exposure to retail, which has hit half-year accounts, is going to shrink, they added..
Target prices for the two FTSE 100-listed firms were upped to 661p from 606p for British Land and to 1,080p from 957p for LandSec.
Meawhile, they added, mid-cap self-storage rental firm Big Yellow’s upside will, instead, be based on a clearer UK political landscape, with the analysts highlighting its potential to reach 90% occupancy rate and a £250mln to support further growth.
Analysts upped the price target for FTSE 250-listed Big Yellow to 1,339p from 1,193p.
Shares in British Land were up 1% to 591.2p, while LandSec and Big Yellow both rose 2% to 984p and 1,175p respectively.