June 14 (Bloomberg) -- Great Portland Estates Plc, the real estate developer focused on London’s West End, rose the most in 17 months in London trading after UBS AG recommended buying the stock after recent declines.
Great Portland climbed as much as 5.4 percent to 556 pence, the biggest intraday increase since Jan. 19, 2012, after UBS said recent acquisitions will lift short-term income. The share price of the London-based developer had fallen 11 percent since the company released full-year results on May 22 through yesterday.
“After the recent pull-back in share price, we see an opportunity to buy,” UBS analysts including Harry Stokes said in a note published today, upgrading the stock from neutral on future developments. “Recent acquisitions should deliver short-term income streams which will boost earnings.”
The value of Great Portland’s sites is being increased by a lack of competing projects as finance for new building remains scarce. Great Portland Chief Executive Officer Toby Courtauld said in May that a pick-up in tenant demand is translating into lettings as the supply of new space to rent will remain muted for some time, especially in the West End.
Net income at Great Portland for the year through March climbed to 180.6 million pounds ($282 million), or 55.7 pence a share, from 155.2 million pounds, or 50.2 pence, a year earlier, company said in May. While developments as a proportion of total assets fell to 8.3 percent from 17 percent in the last financial year, it should rise again, UBS said.
About 387,000 shares traded hands in London, the equivalent of 71 percent of the average daily trading volume during the past three months.
Great Portland was up 4.4 percent at 550.5 pence as of 11 a.m., giving the company a market value of 1.9 billion pounds.
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