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Berkeley Group
Berkeley Group (BKG) / House Builders
The London-focused new home builder markets its properties abroad as financial assets and they sell at a large premium to the wider London residential market. The reason foreigners like to invest in London property is that they see London as a gateway to Europe. If that were to cease, it’s seen as a possibility that foreign investment might go down. Berkeley group would then presumably be more at the mercy of the domestic market which would certainly not be champing at the bit to pay the sorts of prices currently way over the odds for a studio flat! Brexit therefore has the potential to lower the average price of London residential property and thus Berkeley’s profits.
BKG, 17-month chart (Source: IT Finance)
Consensus Roundup
Bullish: Jefferies, Buy, Target 4650p, +52% (2 March)
Consensus: Target 3839p, +25% (17 May)
Bearish: Credit Suisse, Underperform, Target 2372p, -23% (23 Feb)
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Prepared by Michael van Dulken, Head of Research
