Deutsche Bank lifts Landsec price target on Metrocentre acquisition

(Sharecast News) - Deutsche Bank lifted its price target on Landsec on Monday to 750p from 730p following its agreement to buy the Metrocentre shopping centre near Newcastle for £516m. The bank noted this is the largest UK shopping centre transaction since Landsec's acquisition of Liverpool ONE in 2024.

"The acquisition yield of 7.9% is attractive in our view, particularly considering the potential to enhance it to circa 8.3% through near-term asset management initiatives," DB said. "Alongside the £100m earmarked for consolidating its ownership interest in an existing retail asset, we estimate that circa 50% of the rent roll will come from retail.

"Given the high running yields of such assets and compounding rental growth, we think this is an attractive profile against the backdrop of higher discount rates."

DB - which rates Landsec at 'buy' - said that with the stock company trading on an approximately 8.5% earnings yield and a dividend yield approaching 7%, it continues to see strong valuation attractions.

At 1608 BST, the shares were up 0.6% at 618.75p.