Focus On 3 REITS Stocks as Study Predicts Property Market to Face Supply Crunch

Summary

  • A study by Knight Frank has found that the UK property market may face a short-term supply crunch.
  • The shortage was seen mostly in the housing market than in the market for flats.
  • Houses listed for sale was down 33 per cent over the year, while flats listed for sale were up by 7 per cent.

The UK property market might be facing a short-term supply crunch, a study by Knight Frank has found. According to the report, there were fewer properties listed for sale in Wales and the UK in the month of March compared to a year ago.

The report also pointed out that the shortage was seen mostly in the housing market than in the market for flats. Houses listed for sale was down 33 per cent over the year, while flats listed for sale were up by 7 per cent. The report found that the shortage was more chronic in places that had witnessed stronger demand due to lockdowns. In London, house listings fell 3 per cent, and in south-west England, it fell by 42 per cent.

Also read: Real Estate & Mining Shares Lifted FTSE 100 Higher by 0.84%; Just Group Stock Rallied 19.29%

According to the study, January and February saw a lot of uncertainties because the vaccination drive was at an early stage and due to new Covid variants. All these uncertainties contributed to sellers not listing their properties, then the effects of which are being observed now. As demand rose in March, driven by stamp duty holidays, most properties got sold quickly.

Also read: How to ace the real estate game in 2021? Here are few investing tips

 

               

Let us look at three of the biggest residential and commercial REITs stocks by market capitalisation at the backdrop of the supply constraint that UK’s property market might face:

Segro Plc (LON: SGRO)

The FTSE 100 property investment and development company signed new headline rent worth £18 million for the period between January and April against £14.3 million in the same period a year ago. The company said that it witnessed a small jump in the vacancy rate to 4.4 per cent as compared to 3.9 per cent in the previous quarter, which was driven mainly by the company taking backspace for refurbishment in London and Paris.  

(Source: Refinitiv, Thomson Reuters)

The shares of the company were trading at GBX 1,009, up by 0.75 per cent at 12:11 GMT+1 on 4 May. The FTSE100 was at 7,027 up by 0.83 per cent.

Land Securities Group Plc (LON: LAND)

The FTSE 100-listed property development and investment company’s revenue profit for the six months ended 30 September 2020 was down 48.9 per cent to £115 million compared to £225 million for the same period a year ago. The company’s loss before tax was at £835 million compared to a loss of £147 million for the six months ended 30 September 2019.

Also read: Housing Stocks in Focus as The UK House Prices Rise Sharply in April

(Source: Refinitiv, Thomson Reuters)

LAND stock was trading at GBX 735, up by three per cent on 4 May at 12:18 GMT+1. The FTSE 100 was at 7,027, up by 0.83 per cent.

British Land Company Plc (LON: BLND)

According to the company’s update ahead of its full year results, the company collected 82 per cent total rent for FY21, which included rent from offices of 99 per cent and from retail 70 per cent. The company collected 76 per cent of March 2021 rent till date, of which offices were at 96 per cent and retail 54 per cent.

Also read: How Co-Operation Between Landlords and Tenants Can Support Sustainability in A Post-Covid World

(Source: Refinitiv, Thomson Reuters)

The company’s stock was trading at GBX 526.8, up by 1.81 per cent on 4 May at 12:30 GMT+1. The FTSE100 was at 7,027, up by 0.83 per cent.


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