Property stocks have fallen to the bottom of the FTSE 100 after British Land (BLND) said it was cutting its amount of speculative building, warning of uncertainty in the market as Britain leaves the European Union.
Shares in British Land were the biggest fallers on the FTSE 100, down 3.2% at 652.4p, as the real estate investment trust said it was reducing the amount of land it was developing before securing tenants.
'We have entered a prolonged period of uncertainty and businesses will face a number of headwinds,' the company said in its full-year results. 'Mindful of this background, but facing a clear need to move forward, occupiers are continuing to make decisions, but plans are taking longer to come to fruition.
'We expect Brexit-related headwinds to impact our occupational markets. In offices, it will be some years before we have clarity on the impact of proposed regulatory changes which may affect occupier demand, particularly in financial services.'
British Land's warning hit other real estate investment trusts in the FTSE 100. Land Securities (LAND) was down 1.5% at £11.14, Intu Properties (INTUP) fell 1.4% to 269.7p and Hammerson (HMSO) dropped 4.5p to 584p.
'British Land is clearly uncomfortable about the future,' said Nicholas Hyett, equity analyst at Hargreaves Lansdown. 'Speculative developments have been reined right back and leverage is falling as the group sells some high profile assets, including a 50% stake in the Cheesegrater. That's sensible given the group's disproportionate exposure to the prestige London office space most likely to be hit if Brexit results in a mass exodus of bankers, lawyers and the like.'
The FTSE 100 was broadly flat, down 1.4 points at 7,521. Lloyds (LLOY) was up 2.3% at 71.7p as the government sold off the last of its remaining stake in the bank, while Hargreaves Lansdown (HRGV) recovered some ground from yesterday's fall on news of Vanguard's launch of a new platform, up 1.5% at £13.44.
Among 'mid cap' stocks, Sophos (SOPH) soared 105 to 407.1p on strong results and a bright outlook. Shares in the cyber security firm are up 20% this week, after the WannaCry virus sparked demand for the sector.
Mitchells & Butlers (MAB) was the biggest faller, down 6.5% at 257p as the pub operator warned of 'fragile' consumer confidence.
