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Helical is too cheap on a 40 per cent discount

Shares in the office landlord trade at a sharp discount to forecast NAV despite having a strong balance sheet and more robust rent collection than peers
Helical is too cheap on a 40 per cent discount

Commercial landlord Helical (HLCL) has been severely punished by the market over fears of a spike in tenants defaulting on their rent and an increase in vacancy levels. The shares are trading at a sizeable discount, not only to historic and forecast net asset value (NAV) – 39 per cent and 44 per cent, respectively – but also to peers. The extent to which the shares have been marked down seems unjustified, given the prime location of the group’s London and Manchester portfolio, the strength of the balance sheet and its lower level of development commitments.

IC TIP: Buy at 310p
Tip style
Value
Risk rating
High
Timescale
Long Term
Bull points

Shares trade at steep discount to NAV

Reduced committed capex

Low retail and leisure exposure

Ample liquidity

Bear points

Shortfall in rental collection

Slower lettings progress

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