Peel Hunt has slashed its net asset value forecasts for more than 20 property companies, citing Brexit as the “final straw” for a sector which it said has been struggling since the end of last summer.
London property prices are expected to fall by between 5% and 15% following the vote to leave the EU, according to research by analysts Peel Hunt.
The report predicts London offices will be the worst sector affected due to its high exposure to the financial services occupiers.
Despite positive sentiment from Hammerson this morning, which reported a 3.4% NAV boost for the first six months of the year, Peel Hunt forecast a turbulent future for retail.
Hammerson NAV up, seeks South African listing
This was put down to the fall in the pound and consumer confidence combined with the continued move towards online shopping dampening retailers leasing plans.
Student housing provider Unite Group bucked the trend with an upgraded NAV forecast. Peel Hunt said it did not foresee a big impact to student numbers following Brexit and typically, more people attend universities when the economy underperforms.
Compare NAV downgrades across property sectors:
| NAV downgrade forecast by Peel Hunt | 2016 | 2017 | 2018 |
|---|---|---|---|
| REIT leaders | |||
| Land Securities | -11% | -15% | -16% |
| British Land | -10% | -15% | -15% |
| Hammerson | -7% | -10% | -10% |
| Intu | -9% | -12% | -10% |
| Central London | |||
| Derwent London | -12% | -17% | -16% |
| Great Portland | -12% | -18% | -19% |
| Shaftsbury | -11% | -16% | -15% |
| Capital & Counties | -9% | -16% | -18% |
| Industrials | |||
| Segro | -4% | -5% | -5% |
| Hansteen | 3% | 1% | 1% |
| Sirius Real Estate | 0% | 0% | 0% |
| Opportunistic | |||
| LondonMetric | -7% | -11% | -13% |
| Redefine International | -6% | -9% | -7% |
| Developer traders | |||
| U&I | -6% | -6% | -6% |
| Helical Bar | -15% | -24% | -24% |
| St Modwen | -4% | -9% | -10% |
| Office | |||
| Workspace | -8% | -10% | -12% |
| CLS Holdings | -5% | -8% | -7% |
| Regional REIT | -8% | -11% | -10% |
| Retail | |||
| Capital & Regional | -11% | -12% | -12% |
| NewRiver | -7% | -12% | -14% |
| Residential/student | |||
| Grainger | -2% | -4% | -4% |
| Unite Group | -4% | -4% | -4% |
| Self-storage | |||
| Big Yellow | 0% | 0% | 0% |
| Safestore | 0% | 0% | 0% |
| Primary health care property | |||
| Primary Health Properties | 0% | 0% | 0% |
| Assura | 0% | 0% | 0% |
| MedicX | 0% | 0% | 0% |
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