In the run-up to the 23 June referendum, it was claimed by the Remain campaign that one of the sectors most exposed to a leave result would be the property sector. And when the outcome of the referendum became known on Friday last week, property stocks immediately reacted with some dropping by as much as 40% in early trade.

However, these declines could be a great opportunity for the patient Foolish long-term investor. Take British Land (LSE: BLND) for example. Over the past month shares in British Land have lost nearly 20% of their value, taking year-to-date declines to just under 25%. After these declines, shares in the REIT are now trading at a significant discount to its net asset value. 

Specifically, at time of writing British Land is trading at 605p, a 34% discount to the company’s net asset value of 919p reported at the end of March. While there are concerns about the outlook for the UK property market following Brexit, this discount seems rather excessive. Property prices are unlikely to fall by more than 30% in the near term, especially with interest rates set to fall further and the UK’s shortage of affordable housing. 

After recent declines shares in British Land trade at a forward P/E of 19.7 and support a dividend yield of 4.2%.

Excessive discount 

Just like British Land, shares in the UK’s largest real estate investment trust, Land Securities (LSE: LAND) trade at a significant discount to the trust’s net asset value after recent declines. 

At the end of March, Land Securities reported a net asset value of 1,482p per share, which, at time of writing is 43% above the current share price. Even the most cautious economic forecasts for the UK following Brexit don’t suggest that property prices could fall by more than 40%, which is what the market is implying here. 

After recent declines, shares in Land Securities trade at a forward P/E of 24.2 and support a dividend yield of 3.3%.

A play on prime London

Hammerson  (LSE: HMSO) and Great Portland Estates (LSE: GPOR) have also been subject to similar sell-offs. Year-to-date, shares in Hammerson are down by 11% and at the current price of 533p, shares in the REIT are trading at a near 25% discount to net asset value. Similarly, Great Portland’s shares are down by more than 26% and are now trading at a significant discount to the firm’s net asset value of 847p per share as reported at the end of March. 

While Great Portland is one of the REITs with the most exposure to prime London property, the group has historically traded at a premium to its net asset value. So after recent declines, not only does Great Portland look cheap due to the fact that it’s trading below its NAV, but the company is also undervalued when compared to its own historic valuation. Further, a 26% decline in prime London property prices is unlikely in the near term.

Hammerson and Great Portland support dividend yields of 4.4% and 1.3% respectively.

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Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.