Goldman Sachs has remained "cautious" and dropped its valuations on property stocks.
The global investment firm reviewed the European commercial property sector and downgraded Hammerson and Land Securities from ‘neutral’ to ‘sell’.
It cut its price target on both and downgraded British Land from ‘buy’ to ‘neutral’.
"We see an extended period of muted growth and rising borrowing costs given that current gearing levels appear demanding relative to pre-1990 levels and providers of finance are unlikely to regain their past appetite," the Guardian has reported it said.
However, suggestions that the commercial property market is falling have been countered by Shaftesbury, which said in an interim statement that demand for properties would prove resilient in the capital.
"Although property yields are rising, resulting in falling values generally, investor appetite for freeholds in London’s West End remains healthy and supply is always limited," it said.
New investment from abroad has improved the market and kept demand for commercial property high.
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