The share prices of Persimmon plc (LON:PSN) (PSN.L), Berkeley Group Holdings PLC (LON:BKG) (BKG.L) and British Land Company PLC (LON:BLND) (BLND.L) have all fallen by over 7% in the last week. As a result, they are among the FTSE 100’s biggest fallers in the last five trading sessions.
In my view, investor sentiment towards all three shares has declined due to the uncertain outlook for the UK economy. Brexit continues to dominate news headlines, and could even become an increasingly important topic over future weeks.
The House of Commons is due to vote on Theresa May’s Brexit plan in December. I think there is a good chance that it will fail to make it through Parliament, since Labour, the SNP, DUP and Liberal Democrats have all apparently stated that they are against the deal. There are also a number of Tory MPs who look set to vote against it. With the government lacking a majority, this could mean that it fails to pass through Parliament.
Investors may therefore seek to price in additional uncertainty within the property market, and this could lead to further volatility for shares in Persimmon, Berkeley and British Land in the short run.
Over the long term, I feel that all three stocks could have investment potential. Persimmon appears to have a strong balance sheet and may benefit from continued high demand for new homes, while Berkeley seems to have a dominant position in the prime market as well as a strong management team. Likewise, British Land has a strong portfolio in my opinion, and may be able to capitalise on weaker asset prices.
Therefore, while there could be further share price falls ahead for all three companies, in the long run I believe they may offer turnaround potential. They could even outperform the FTSE 100 in future years in my view.