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Derwent London's valuation looks too pessimistic

Shares in the London office landlord are trading at an unwarranted discount to net asset value as concerns persist over how well rents will hold up
Derwent London's valuation looks too pessimistic
  • Top-end offices more resilient to the threat of an increase in flexible working
  • Low exposure to retail and hospitality, and higher rent collection rates
  • The shares are trading at a 10 per cent discount to forecast NAV
Tip style
Growth
Risk rating
Medium
Timescale
Long Term
Bull points

Progressive dividend maintained

Shares at discount to NAV

Strong balance sheet

Low retail exposure

Bear points

Rental values may decline this year

Slowdown in new lettings

The list of companies embracing a permanent shift to flexible working last week gained a new name. HSBC (HSBA) announced its executives would not only switch to hot desking in its London offices, but employees across the business would split their working hours between offices and home. 

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