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Property giants ‘offer value’ for patient investors despite retail


Co PLC () and Group PLC () shares offer value for patient investors, broker Peel Hunt believes. 

With both companies having withdrawn dividends and with a lack of certainty about the future, Peel Hunt’s analysts said they were assuming that both will restart payments in the third quarter.

With British Land’s retail portfolio value down nearly 40% over the past two years, it now yields around 7%, and “is now looking more realistic”, the analysts said.

But with shares in the owner of shopping centres such as Meadowhall in Sheffield and mix-used London developments such as Broadgate, Paddington Central and Canada Water up 15% over the past month, the analysts downgraded their rating to ‘add’ from ‘buy’ but upped target price to 500p from 470p.

LandSec was kept at ‘add’ with the target price nudged up to 760p from 720p.

“We continue to believe that both shares offer good value for the patient investor,” the analysts said, with “little to choose between the two names with very similar valuations and capital structures”. 

Both sit at around a 35% discount to the broker’s trough net asset value forecasts, yield 5.5%-plus based on forecast annualised dividends, and have trough loan-to-value ratios around 35%.

“Sustainability, social obligations and customer relationships have all risen to the fore,” the number crunchers added. 

“Both REITs have shown themselves to be good corporate citizens with their commitments to be net zero carbon by 2030 and their immediate support to local communities.”



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