Proactive Investors - British Land Company PLC (LON:BLND), one of the UK's leading property groups, saw its shares open 3% lower on Wednesday due to a slump in property valuations brought on by high-interest rates and broader economic concerns.
The downturn has impacted the commercial real estate sector significantly. British Land, which owns landmark developments in the City and Paddington areas of London, swung from a profit of £965mln to a pre-tax annual loss of £1.04bn for the year ending March 31, 2023.
The company's properties have seen a valuation drop of 12.3% year-on-year. This decline comes amidst rising interest rates and macroeconomic challenges, which threaten the tentative recovery of the property sector from the pandemic lows.
Shares in the group, down 10% in the year to date, opened 11p lower at 366.90p on Wednesday.
Shore Capital provided this analysis: "British Land is not actively in a repositioning process with its portfolio per se – rather staying focused on its core campus and retail activities with small opportunistic add-ons being made in life sciences and urban logistics, where it looks a bit late to the party.
"We believe there are more compelling investment opportunities for capital allocation in the sector and we reiterate our 'sell' recommendation."