RBC lowers target price on Hammerson

Analysts at RBC Capital Markets cut their target price on real estate investment trust Hammerson from 65.0p to 55.0p on Friday, stating the group's planned restructuring marked a "big change in strategy".

RBC said Hammerson's planned switch from being a European shopping centre specialist to a more diversified regional UK REIT was consistent with the appointment of Rob Noel as chairman but added that the move actually created "a number of challenges"

The Canadian broker believes various factors typically lead management to move quickly to sell properties that are no longer a stated focus. However, RBC said the current market environment was likely to make disposals "even harder than normal" for a committed seller.

"Restructuring all its UK leases, significant management change and weak macroeconomic prospects add to the challenges of delivering successfully on its plans in our view," said the analysts.

As a result, RBC reduced its 2020-2024 underlying earnings per share forecasts by 57-73% and EPRA net tangible assets by 37-54% to reflect the weaker than we expected first-half results from the group and additional disposals on weaker terms.