Insider: three big property firms on the buy list

Senior directors at Barratt Redrow (LSE:BTRW) and Berkeley Group Holdings (The) (LSE:BKG) have countered the City’s latest selling of their shares by making investments worth more than £150,000.

Board chair Caroline Silver spent £49,000 and finance chief Mike Scott £10,000 after Barratt Redrow’s year-end update on Tuesday showed home completions slightly below guidance.

• Our Services: SIPP Account | Stocks & Shares ISA | See all Investment Accounts

The prospect of fewer than expected outlets in the new financial year also disappointed analysts, as the FTSE 100 builder said the benefits of planning reforms were taking longer to be felt.

Peel Hunt cut profit forecasts for the 2026 and 2027 financial years by 16% and 20% respectively before lowering its price target to 470p from 540p.

However, the broker upgraded its stance to Buy in light of Tuesday’s 9% fall in price to 377.25p, adding that a 15-20% discount to net asset value looked an “attractive entry point”.

It said the update was clearly disappointing but that the group still had scope to deliver against its medium-term targets of 22,000 completions and an operating margin of more than 15%.

Completions fell 7.8% to 16,565 in the year to 29 June, reflecting fewer than expected international and private rental investor sector purchases in its London businesses.

Fragile market conditions and a broadly flat position on the average number of sales outlets means the company expects current year completions in a range of 17,200 to 17,800.

Some margin improvement was noted in the update, despite build cost inflation continuing to eat away at limited price growth and the synergy benefits of last year’s Redrow merger.

• Barratt Redrow shares extend five-week slump to 25%
• Shares for the future: a speculative FTSE 100 investment
• Sign up to our free newsletter for investment ideas, latest news and award-winning analysis

The shares were 554p around the time of last August’s deal completion, only to dip below 400p in November, January and April. They rallied to 482p by mid-June before renewed pressure on the sector due to economic headwinds and higher-for-longer mortgage costs.

Berenberg, which has a Hold recommendation and price target of 485p, believes that a robust balance sheet and further Redrow synergies left the group well positioned for when a more favourable market environment does emerge.

Scott, who joined Barratt Developments in 2021 having previously been finance chief at Countryside Properties, bought his shares on Tuesday at a price of 385.7p. His dealings were followed the next day by Silver’s transaction at a cheaper 374.9p.

At Berkeley Group, chief executive Rob Perrins bought shares in his company for the third time in a month after the Barratt Redrow update heaped more pressure on sector valuations.

His latest move worth £100,000 took place at a price of 3,550p, having spent a similar amount at 3,571p on the day the Chancellor’s tearful appearance at Prime Minister’s Questions caused a spike in government bond yields and sent housebuilding shares sharply lower.

• The Week Ahead: Lloyds Bank, NatWest, BT, Vodafone, Wetherspoon
• Stockwatch: is it ‘darkest before dawn’ for this cyclical share?

An earlier £500,000 investment at 3,846p took place after the release of annual results on 20 June, when Perrins disclosed guidance for lower profits of about £450 million in the current financial year and the one after.

Profits for 2024/25 were £528.9 million, which Perrins described as an excellent performance in the face of volatile trading conditions and regulatory headwinds.

He said his company had added longer-term value, both through land holdings and its new build-to-rent platform. It also returned £381.5 million to shareholders at the start of the Berkeley 2035 strategy announced in December.

Analysts at Berenberg recently said that shares were a “compelling proposition” over the medium term, highlighting a price target of 5,000p.

Buying British

Two British Land Co (LSE:BLND) directors have topped up their stakes by spending £150,000 on shares at prices more than a third below the company’s last disclosed net asset value.

William Rucker, who was appointed chair last July, spent £100,000 on Wednesday at a price of 344.8p while long-serving non-executive director Alastair Hughes dealt £50,000 of shares the following day at a similar price.

The FTSE 250-listed group, which focuses on offices in central London and a retail portfolio in out-of-town locations, reported tangible net assets per share of 567p in May’s annual results.

The shares were above 400p prior to those results, when chief executive Simon Carter highlighted continued occupational strength in key markets and above inflation rental growth.

He added: “Return to the office is in full swing, with mid-week occupancy back to pre-pandemic levels, and value and multi-channel retailers are competing aggressively for space on our retail parks.”

• ii view: income play British Land predicts profit growth
• Here’s where professional investors are piling in

Shares fell amid disappointment that underlying earnings per share will be broadly flat in the current year before accelerating to 3-6% per annum earnings growth in subsequent years.

Economic uncertainty and the gradual pace of interest rate cuts have also weighed on the sector.

However, Carter added: “Volatility creates opportunities for those that can be nimble as we showed with our opportunistic acquisitions, disposals and capital market issuances this year.”