Real estate sector 'already reflects' soft Brexit upside

Liberum noted that a "potential" value trade in real estate "could still reside in the extent to which equity markets have over-priced a correction in [the retail sub-sector] values for the majors".

However, the analysts said they were "not ready to make this call" as they felt the market is likely to only be "at the cusp of a correction in underlying asset values", with capital values [per square foot] for some retail are "well above alternative use and levels of financial leverage are higher this feels too early".

The nearest to sticking their neck out was to express a preference for Land Securities, principally due to its unlevered discount and lower retail exposure.

Heading into results season, the analysts see modest upside risk for net asset value to the industrial REITs and Unite, and downside risk to retail 2019 NAV forecasts.

Given share price performances year to date, Assura and Unite were downgraded from 'buy' to 'hold'.

Derwent London and Great Portland Estates, both reiterated on 'hold' ratings, "offer the cleanest assessment of Brexit risk" as they are solely focus on the London office market with small committed development pipelines.