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Land Securities lifted by Deutsche Bank to ‘buy’ from ‘hold’ in major review of the London office market

Aside from Land Securities, the German bank’s analysts also upgraded ratings for mid-cap property firms Derwent London and Great Portland Estates both to ‘buy’ from ‘hold’ too
London offices
However, they downgraded their rating for FTSE 100-listed British Land to ‘hold’ from ‘buy’

Deutsche Bank gave a boost to Land Securities PLC (LON:LAND) on Wednesday, upgrading its rating for the blue-chip real estate group to ‘buy’ from ‘hold’, one of three positive changes and one negative, in a major review of the London office market.

Aside from Land Securities, the German bank’s analysts also upgraded ratings for mid-cap property firms Derwent London PLC (LON:DLN) and Great Portland Estates PLC (LON:GPOR), both to ‘buy’ from ‘hold’, and raised target prices for all three as well as for Workspace Group PLC (LON:WKP).

READ: Land Securities' head of retail property departs

However, they downgraded their rating for FTSE 100-listed British Land PLC (LON:BLND) to ‘hold’ from ‘buy’, in spite of increasing its target price, citing valuation grounds – with only 5% upside potential to the raised target.

In the note to clients, Deutsche Bank’s analysts said they think that the market is looking at London's office market “through a too simplistic lens.”

They pointed out: “As part of this extensive research report, we have met with and interviewed a number of industry participants to strengthen our grasp of the office market outlook, but also to hear from the practitioners who are closest to the market, closest to the tenants they act for or engage with, and closest to understanding what landlords need to deliver to succeed.”

The analysts said this has given them a “deeper knowledge of the nuances of the sector backdrop” and has led them to alter their “submarket view to promote the stocks that we believe are the best-positioned to take advantage of the changing market trends.”

They concluded: “We are once again looking Back to the Future.”

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