Liberum maintains 'hold' rating on 'steady' British Land

Analysts at Liberum maintained their 'hold' rating and 725p target price on real estate investment trust British Land on Tuesday.

Liberum said British Land's first quarter had confirmed steady overall conditions but noted that retail pressure could provide immaterial pressure to the group's full-year earnings.

The broker felt that, although the group's occupancy had remained unchanged at 98%, gains seen in British Land's office unit appeared to have been offset by continued challenges rearing their head at its retail wing.

British Land's disposal of 5 Broadgate for £1bn, in line with book value, represented another "opportunistic disposal" in Liberum's eyes, capitalising on continued strong international demand for prime London office assets and realising value on a now dry building.

With its 50% of the proceeds, British Land has extended its prior share buyback plan by a further £200m, something the broker expects to be accretive to its net asset value by roughly 1%.

Liberum also pointed out that it felt British Land's master development agreement with Southwark Council was one of the "most significant amongst the major REITs" and holds the potential to add material value to the group.

"In a flat market, British Land continues to balance activity to deliver future value creation, while limiting its overall financial and speculative risk exposure," Liberum concluded.