A file photo of Brookfield Properties' building at 300 Madison Avenue in New York City.
One of Canada's largest commercial property companies took a beating on Friday following news of the Leave victory in the Brexit referendum. At least one analyst thinks that means a buying opportunity.
Units of Brookfield Property Partners LP fell sharply Friday on the TSX, falling $1.73 to $29.70, or 5.5 per cent.
The company's European office holdings are located in London and Berlin, including the major Canary Wharf Group project. The joint venture with the Qatar Investment Authority, located along London's waterfront, consists of more than 37 buildings and 16 million square feet of office, retail and leisure space.
Still, Canaccord Genuity analyst Mark Rothschild said the selloff of Brookfield's units following the Brexit vote in favour of the United Kingdom leaving the European Union was extreme, overdone and irrational.
"They have a large exposure in the U.K. but it's probably only 10 per cent of their cash flow," he said. "And much of that would be hedged with U.K. with long-term leases in place and some of the highest quality assets in London."
Mr. Rothschild said even if there is a slowdown in leasing in London, the impact won't be felt on the company any time soon.
"I think this is an exciting buying opportunity for many investors," he said.
As for the possibility financial institutions and companies may move their European head offices away from London or other locations in the U.K., Mr. Rothschild acknowledged there would be negative impact on the commercial real estate market and BPY.
"The question is what will be the magnitude," he said. "We don't believe it's anywhere near the material that justifies a 7 per cent move in the unit price."
His price target is $36 (U.S.).
According to Bloomberg, Brookfield Property Partners has also been rated a "sector outperform" by Scotiabank and an "outperform" by RBC Dominion Securities. The average 12-month price target on the Street is $34.50.
Editor's note: In an earlier version of this story, Mr. Rothschild's target price was incorrectly listed in Canadian dollars. It is, in fact, $36 (U.S.). This version has been updated.