Berenberg raises target price on RDI

Berenberg raised its target price on real estate investment trust RDI from 100.0p to 115.0p on Tuesday, stating the group's portfolio rebalancing justified its rerating.

Berenberg said RDI's recent disposal activity was "transformative" as despite challenging market conditions, the firm had completed around £220.0m of disposals in the past two weeks and about £330.0m since announcing its strategic review 18 months ago.

The German bank noted that these moves had lowered retail exposure to 11.8%, lowered pro-forma loan-to-value to 30.2% and had accelerated RDI's transition toward a lower-levered, higher-growth, higher-quality business.

"With strategic progress exceeding expectations for both pricing and speed, we review our forecasts ahead of the publication of FY 2020 results, expected on 5 November," said Berenberg, which also reiterated its 'buy' rating on the stock.

The analysts added that RDI's share price was underpinned by the recent sale of a 29.4% interest to Starwood Capital at an implied price of 95.0p per share and highlighted that it still continues to see "significant upside" to current levels.