Berenberg upgrades Shaftesbury Capital to 'buy'

(Sharecast News) - Analysts at Berenberg upgraded Shaftesbury Capital from 'hold' to 'buy' on Monday, saying the shares now offered "an attractive entry point" relative to the wider UK real estate investment trust sector. Berenberg noted the stock has been broadly flat year‑to‑date while the sector was up around 13%, despite Shaftesbury Capital being the only name in its UK real estate coverage expected to deliver a 10% total accounting return in 2026. Berenberg lifted its price target to 166p from 151p.

The German bank, which hiked its target price on the stock to 166p from 151p, said first‑half results underlined the resilience of valuations, with assets rising 3.3% in the six months to June despite a low 3.7% net initial yield. Strong occupier demand across retail and food & beverage, alongside smaller average lot sizes, continued to support values even as EPRA vacancy nudged up to 4.7%.

A key driver of Shaftesbury's improved outlook was the sharp rise in "building under‑rent", now sitting at £20.3m and making up almost 10% of annualised rental income, compared with £2m last year. Berenberg said this provides clear visibility on like‑for‑like rental growth and strengthens confidence in management's 5% to 7% rental growth target.

Berenberg raised EPRA NTA estimates by 3-4% and EPRA EPS forecasts by up to 9% across 2026-30, reflecting stronger‑than‑expected H1 NTA and modelling of the under‑rent unwind alongside ongoing ERV growth.

Additionally, Berenberg described Shaftesbury as a potential "AI winner", arguing that structurally deflationary effects from artificial intelligence could push consumer spending toward experience‑led, supply‑constrained destinations such as the West End, increasing the scarcity premium for historic real estate.





Reporting by Iain Gilbert at Sharecast.com