Kepler Cheuvreux Cuts British Land, Land Securities Ratings as Rate Pressure Bites

Kepler Cheuvreux has downgraded British Land and Land Securities in fresh notes, pointing to higher interest rates squeezing both firms’ room for manoeuvre.

British Land was cut to Reduce from Hold, with its price target trimmed to 380p from 405p. Kepler Cheuvreux said the “difficult” macro backdrop, driven by higher rates, “adds to the challenge of communicating a clear and exciting strategy” for the REIT’s incoming chief executive.

Land Securities was moved to Hold from Buy, with its target cut to 645p from 685p. Analyst Julian Livingston-Booth said higher rates are likely to reduce liquidity in London’s office investment market, complicating Land Securities’ strategic capital allocation plans.

Both downgrades trace back to higher rates, but the specific concerns differ: for British Land, the tougher backdrop makes it harder for incoming management to set out a clear strategy, while for Land Securities, the worry is reduced liquidity in London’s office investment market complicating capital allocation.