Barclays upgrades British Land to 'overweight'

Tue, 26th May 2026 14:51

(Sharecast News) - Barclays upgraded British Land to 'overweight' from 'equalweight' on Tuesday and reiterated its 'overweight' rating on Land Securities as it argued that both now offer what investors increasingly want from listed real estate.

This includes high recurring earnings per share, attractive EPS compound annual growth rates, cash flow and sensible ND/EBITDA, "not an NAV-led story dependent on appraisers' cap-rate assumptions".

The bank said that following three years of broadly flat earnings, British Land is returning to earnings growth and it thinks the valuation screens attractively given increased earnings growth visibility. "BLND has spent much of the past decade being judged on NAV, ERV growth and valuation yields, but the market increasingly cares about recurring earnings, EPS CAGR and cash flow delivery," it said.

"The company has shown a strong operational performance, clear leasing momentum, in particular from AI and technology tenants, and we think it offers the right product in an increasingly bifurcated London office market."

Barclays said it models a 4.5% 5-year EPS CAGR, up from 3.7% previously.

"Following the shares' underperformance year-to-date, we think the valuation is attractive both versus its own history and in isolation," it said.

"BLND trades on circa 12.5x FY27E price-to-earnings, or an c.8.0% EPS yield, with FY27 guidance of at least 6% earnings growth and a medium-term EPS growth target of 3-6% per annum.

"This is not an NAV story; it is an income and income-growth story, and we think British Land's high-quality office portfolio and well-performing retail park portfolio will lead to continued operational strength."

Barclays lifted its price target on British Land to 465p from 450p.

The bank upped its price target on Landsec to 780p from 770p. It said the company offers investors a decent London office portfolio and strong retail exposure on attractive income yields, with visible rental growth, development lease-up and capital discipline driving the EPS CAGR.

"That is precisely what listed real estate should offer, in our view," Barclays said.

At 1448 BST, British Land shares were up 2.9% at 407.60p and Landsec was 2.2% higher at 644p.

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