British Land consensus too bearish as UK retail property market turns a corner, says JP Morgan

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The investment bank highlighted that there had been a recent “improvement in retail warehouse capital growth”, which makes up around 53% of British Land’s retail portfolio

British Land Company PLC’s (LSE:BLND) consensus valuation is “too bearish”, according to analysts at JP Morgan, who increased their target price for the group to 618p from 600p as they said the tide “continues to turn” for the UK’s retail property market.

In a note on Monday, the investment bank said data had revealed an “improvement in retail warehouse capital growth”, which they noted made up 53% of British Land’s retail portfolio, while shopping centres had “upended their 65 months of consecutive capital value declines”.

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“[The 2022 net asset value] consensus for BLND has moved up 2%, but we continue to see this as too bearish,” JP Morgan said, adding that the company’s potential sale of a majority stake in the Paddington Central business centre could help the group pay down its debt and “demonstrate demand for London offices and release capital for projects”.

Shares in British Land rose 0.3% to 534.2p in mid-morning trading.

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