Hobson: Property Stocks Need Gut Instinct Judgement

THE WEEK: If you have not used up your ISA allowance, get on with it, says Rodney Hobson. By the time you have waded through all the Budget documents it will be too late

Rodney Hobson 21 March, 2016 | 8:14AM

Regular reader of this column Richard Barrand raises the valid point that commercial property developers such as British Land (BLND), Great Portland (GPOR), Hammerson (HMSO) and Land Securities (LAND) tend to have low price/earnings ratios despite being good dividend payers. Commercial property values have not fallen, so why have the shares?

British Land, for example, tumbled from 876p in October to a low of 664p last month, Land Securities from 1352p to 965p and Great Portland from 889p to 684p while Hammerson slid from 703p last May to 535p.

This is in sharp contrast to housebuilders, whose shares have soared in the economic recovery since 2009 to the point where they are, if anything, overvalued.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
British Land Co PLC388.00 GBX-3.60
Great Portland Estates PLC627.40 GBX-2.12
Hammerson PLC83.82 GBX-7.26
Land Securities Group PLC566.00 GBX-3.71

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.

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