Canaccord keeps Shaftesbury at 'hold' but raises target price

Canaccord Genuity retained its ‘hold’ rating on real estate company Shaftesbury on Tuesday but raised its target price to 996p from 934p.

The broker said it was “confident” that the company would continue to see demand in rental income and asset value growth.

“Our net asset value (NAV) forecasts are increased to reflect the strength of occupier demand across Shaftesbury’s West End village clusters,” said analyst Charlie Foster.

“Our September 2016 NAV increases 8% to 964p with 2017 up 10.7% and 2018 up 11%. Our September 2016 earnings per share increases 7.5% with 2017 up 10.6% and 2018 up 11.9%.”

Canaccord also raised its dividend forecasts to 14.4p in 2016, 15.5p in 2017 and 16.7p in 2018, reflecting growth of 5% for next year and 7.5% for the following two years.

The analyst said that the group’s 2015 results reflected a 3% beat against its NAV forecast and a 4% beat against its EPS estimate. The dividend was in line, up 5%.

The valuation of the company’s West End portfolio increased 18% with Carnaby leading the way at 21%, followed by Charlotte Street at 20.3%, Longmartin at 19%, Chinatown at 17.3%, Soho at 15% and Covent Garden at 14.8%.

"This acceleration bodes well for future prospects,” said Foster.

Shares rose 0.72% to 911.50p at 1420 GMT.