UK property equities

 Real Estate Capital UK commentary

 UK property stocks lost 4.9% in January, slightly underperforming the wider stock market with relative performance of -1.4%. REITs performed worse at -7.3%.

The property sector edged up in the first week of February, aided by a bullish Knight Frank update on central London, before falling in the second week. The UK returned 46.9% over 12 months, beating Macquarie Research’s developed market average by a small margin.

British Land’s Q3 update, covering the rapid value rises in Q4 2009, showed that the portfolio grew by 8.2%, higher than most analysts’ forecasts. But the company is cautious and has no plans to resume City developments such as the Leadenhall Street ‘Cheesegrater’.

Great Portland Estates was more bullish after its portfolio value rose 8.7%; it expects a return to West End rental growth this year and plans to start three schemes in the first half of 2010.

Shaftesbury’s quarterly update said conditions are buoyant and that it has secured lettings at or above estimated rental values. Liberty announced a split into a core Capital Shopping Centres REIT and a London developer.