Credit Suisse First Boston (CSFB) has upgraded its overall rating for the UK quoted property sector, from underweight to neutral.
The broker’s findings include a boosting of its price targets and recommendations for British Land and Land Securities.
John Gellatly, head of the CSFB research team, said: “We believe that the sector offers an attractive absolute shareholder return of 11% on a 12-month view, driven by a combination of overall NAV growth of 6.3% and a further tightening in the sector discount to NAV.”
However, CSFB said most of the improvement would come in the next three to four months.
It added: “Beyond that we believe sector prospects are muted.
“We think there is an air of irrational exuberance around the sector that will become deflated through the latter part of the year once the fundamentals become more evident.”
CSFB upgraded British Land from a hold to a buy recommendation, saying better communication and recent board changes had led to strong performance and that the discount to NAV had tightened significantly in recent months.
It lifted its price target from 543p to 654p. BL gained 26.5p to 626.5p on the news.
CSFB upgraded Land Securities (LandSec) from sell to hold, believing that it would continue to benefit from a revival in propertys fortunes.
However, it forecast that portfolio growth would probably be relatively weak, and said that LandSecs management needed to stabilise following a string of recent changes.
CSFB said shares deserved to be at 1,005p, up from a previous price target of 874p. They are currently at 954.5p.
Other changes were:
- Brixton – upgraded from sell to hold; price target raised from 251p to 285p
- Chelsfield – downgraded from buy to hold; price target raised from 346p to 373p
- Grantchester – downgraded from buy to hold; price target raised from 241p to 244p
- Shaftesbury – downgraded from buy to hold; price target cut from 293p to 284p
EGi News 16/05/02
