Berenberg praises RDI REIT's strong balance sheet, upgrades to 'buy'

Berenberg said Covid-19 would, in its view, have a "significant impact" on RDI's operations but pointed out that the company's £85m-worth of cash on hand and the proceeds from its sale of the Bahnhof Altona Center in Hamburg were due imminently.

"We do not, therefore, anticipate a liquidity crunch," stated the analysts.

The German bank noted that while RDI was likely to delay non-core asset sales and rebase the dividend, it still expects portfolio loan-to-value ratio to fall within the 30-40% range that it targets by August 2021.

"We also continue to expect the portfolio weighting of UK retail to fall to 15% by FY 2023," noted Berenberg.

The analysts also said RDI's current valuation, a 68% discount to its last-reported net asset value, significantly undervalued the income-generating prospects of its "high quality portfolio".

Finally, despite shares being down 58% year-to-date, Berenberg said its price target remained unchanged at 80p.