Broker snap: UBS upgrades British Land to buy

9th Aug 2011 12:08

UBS upgraded property group British Land from neutral to buy on Monday, saying that the firm's strategy becomes more attractive in a "low growth and risk averse environment".While the first quarter was a "modest miss", the broker raised its earnings per share estimates by 1% driven by recent accretive acquisitions. However, net asset value expectations were lowered due to minimal assumed retail growth for the remainder of 2011."The group's income stream is defensive with relatively low expiries and voids (average lease lengths of 11 years and vacancy 2.7%). We estimate on completion of the development programme the earnings yield will be greater than 6% (based on today's rents).""Although we make no change to our price target [of 610p], based on the current valuation and upside potential we upgrade our rating to buy."Shares were 0.2% lower at 503p by 12.08pm on Tuesday.BC