Britain’s top share index fell on Tuesday, with real estate investment trusts dropping after Standard Life Investments suspended trading in a real estate fund and housebuilders slumping amid the sector’s post-Brexit outlook.
UK REITs fell after Standard Life said late on Monday that the decision was taken after an increase in redemption requests due to uncertainty following the EU referendum result.
Standard Life Investments Property Income Trust (SLI.L) slumped more than 14 per cent to its lowest since late 2013, while Land Securities (LAND.L), British Land (BLND.L) and Intu Properties (INTUP.L) fell 3.1 to 4.5 per cent.
Housebuilders were hit hard, with Barratt Development (BDEV.L), Taylor Wimpey (TW.L) and Berkeley Group (BKGH.L) falling more than 5 per cent. Persimmon (PSN.L) dropped 5.2 per cent, despite reporting a 12 per cent rise in first-half revenue and saying it saw “good opportunities” ahead.
Hargreaves Lansdown analyst Laith Khalaf said, “You wouldn’t guess from Persimmon’s results that the company has lost around a third of its value in the last fortnight”.
“That’s because the stock market is looking forward to the next six months and beyond, and the Brexit vote is casting a long shadow over the UK house building sector … until we get a picture of housing activity following the referendum result, the stock market is likely to push the sell button first.”
About 8 billion pounds ($10.5 billion) was initially wiped off the market value of top British housebuilders following the Brexit vote. The stocks started falling again after some recovery.