British Land has dropped out of the FTSE 100 as a result of the latest reshuffle of the UK’s top equities index.
As the REIT slides down into the FTSE 250 it is being replaced by engineering firm IMI.
The fall of British Land could be seen as symbolic of the squeeze being put on UK property, and the economy as a whole, by steep rises in interest rates.
Shares in British Land have fallen by a third over the past year, sinking to 345p from 536p. This has taken the market cap down to £3.2bn.
In contrast, IMI has enjoyed a strong run and recently lifted profit forecasts. The engineer’s shares have risen 14% over the year to 1612p for a market cap of £4.2bn.
Online supermarket Ocado had been seen as a likely faller ahead of the readjustment of the indices, however stronger than expected performance from its partner M&S was enough to keep it in the top group.
Susannah Streeter, head of money and markets, Hargreaves Lansdown commented: “Ocado, like Everton, looks like it may have escaped relegation at the last gasp as the FTSE reshuffle deadline loomed. Instead, it looks like British Land will be demoted, after shares in the commercial property giant fell further as fresh hikes in interest rates were forecast.
“The value of its property portfolio had already been sideswiped by the rapid tightening in monetary policy and the shocker of an inflation reading last week, dented the company’s valuation further.”
“Other movers this quarter include IMI, formerly Imperial Metal Industries, based in Birmingham, which is heading for promoted to the FTSE 100, from the FTSE 250,” Streeter continued. “The engineering company has seen its share price surge by more than 23% year-to-date and it’s lifted its full year earnings guidance following a strong performance in the first quarter.”
