British Land share price sell-off accelerates: Buy the dip?

British Land (LON: BLND) share price tumbled to the lowest point since December 19 as concerns about the real estate industry continued. The stock tumbled to a low of 377.1p, which was ~20% below the highest level in 2022, meaning that it has moved to a bear market.

Interest rates concerns

British Land is a leading company in the UK real estate industry. The company has over £14.1 billion in assets under management and over 21.7 million sq ft of floor space. It operates its business through its key segments like Campuses, Retail & Fulfillment, and developments.

As a result, with the UK’s economy on the verge of a recession, there are concerns that its occupancy will continue falling. This explains why the stock has been in a strong bearish trend in the past few months.

Another reason, as I wrote in an article on SL Green, real estate companies are suffering from the rising interest rates. In the UK, the Bank of England (BoE) has delivered several interest rate hikes since December 2021. Similarly, in the US, the Federal Reserve has hiked interest rates from near zero to about 4.5%.

Therefore, there are concerns that REITs with exposure to the commercial sector will struggle as rates remain high. In the United States, the Federal Reserve will deliver its decision on Wednesday while the BoE will hike rates on Thursday.

With the UK consumer inflation rising, there is a possibility that the BoE will hike rates by 0.50% instead of the consensus estimates of 0.25%.

Another key concern for British Land is the ongoing collapse of UK high-street retailers. In the past few months, several companies like Joules and Made.com collapsed. Business insolvencies jumped by 30% to 22,000 in 2022.

The most recent results showed that British Land’s underlying profit jumped by 13% to £695 million while the gross income rose by 4.1%. And on Tuesday, British Land acquired 300k sq ft Capitol Retail and Leisure Park in Houston for £51.5 million.

British Land share price forecast

BLND stock by TradingView

The daily chart shows that the BLND stock price has been in a strong bearish trend in the past few days. It moved below the key support level at 431.5p, the lowest point on February 23rd. The 25-day and 50-day exponential moving averages (EMA) formed a bearish crossover pattern. It has moved close to the 23.6% Fibonacci Retracement level.

Therefore, the stock will likely continue falling as sellers target the key support level at 363.9p, the highest point on October 4.