Credit Suisse downgrades Derwent London and Great Portland on Brexit risks

Recent underperformance by the listed UK real estate outfits focused on the London office market was the result of the upcoming vote on the country's continued membership of the European Union, but the present moment did not seem to be an "obvious entry point", Credit Suisse said.

Although the London office market remained a landlord's market for now, "it could turn if a demand-side shock combined with increasing development", analysts Ben Richford and Marios Pastou said in a research not sent to clients on Thursday.

Investors should thus be wary of being enticed by the discounts to net asset values that stocks in the sector were offering.

Richford and Pastou downgraded their recommendations on Derwent London and Great Portland Estates, from 'neutral' and 'outperform' to 'underperform' and 'neutral', respectively.

The target price on the former was bumped down from 4280p to 3010p and that on the latter from 1020p to 760p.

However, the Swiss broker was more positive on the outlook for retail/leisure shares.

Hence, it upgraded its view on Shaftesbury from neutral to outperform, but nevertheless trimmed its target from 995p to 945p.