Buy Shaftesbury PLC (LON;SHB) and Capital & Counties PLC (CapCo) shares because London’s West End is always going to be there and in demand Berenberg argued today.
“We continue to forecast strong growth prospects for both of the London office specialists as markets recover.”
"Current valuations, the uniqueness/irreplaceability of both portfolios, the recovery potential of the West End and current weight of private equity capital awaiting deployment make external M&A a possibility," added the broker.
More likely though is a carve-out of Shaftesbury’s Covent Garden portfolio to 25% shareholder CapCo (LON:CAPC), said Berenberg.
The targets are 200p for Capco and 725p for Shaftesbury against prices respectively today of 172.5p, up 3.4%, and 600.5p, up 2.4%.