British Land (LON:BLND) has announced a share buyback programme as it updated investors on its recent performance.
Highlights from the company statement:
Against a backdrop of continuing strong demand in its investment markets, British Land announces that it intends to allocate up to £300 million of capital to a share buy-back during the current financial year.
The Board regularly reviews capital allocation to optimise long-term returns for shareholders. Since the year end, the Company has continued to sell into a strong investment market. However, currently, opportunities to purchase at attractive returns are more limited, and investment in the Company's shares at the prevailing discount offers better value than further asset acquisitions.
Since the start of the financial year, the Company has achieved good disposal and leasing progress and continued to develop the pipeline of development opportunities that it has already created. At the AGM today, the following overview of recent activity will be provided:
· Since the Full Year Results announcement in May, the sale of The Leadenhall Building for £575 million (BL share) has been completed, £135 million assets have been sold and a further £88 million are under offer
· In total, 370,000 sq ft of lettings and renewals were made during the first quarter at 7.8% ahead of ERV
· A further 870,000 sq ft of space is under offer or in advanced negotiations across British Land's three London campuses
· This space under offer includes all 310,000 sq ft of office space at 1 Triton Square, Regent's Place, the plans for which have now been approved by the Mayor. The Company expects to commit to this £200 million development in the next few weeks
· At 1 Finsbury Avenue, part of the Broadgate Campus, work will start on the £35 million (BL share) refurbishment next month, adding retail, a new cinema and roof terrace to the building. Exclusive discussions regarding 78,000 sq ft of this improved space, representing 27% of the total available, are underway with technology company, Mimecast
· As part of the first-phase roll out of Storey, the flexible workspace brand, the lease of 25,000 sq ft of space at 2 Finsbury Avenue has been agreed with Kingfisher Digital
Chris Grigg, Chief Executive, will state: "This rolling buy-back programme reflects our commitment to seeking the best long-term returns for shareholders.
"We continue to see strong demand in the investment market, which makes opportunities to acquire new standing assets, at attractive returns, more limited than usual. With our shares trading at a substantial discount to NAV and providing a 5% dividend yield, allocating capital into a share buy-back represents a clear value opportunity.
"With substantial proceeds being realised from our disposals programme, we do not expect any material change in our loan to value ratio as a result of the share buy-back. We retain significant resources to develop the pipeline of development opportunities we have created and the flexibility to respond to any changes in market conditions."
As announced at the Full Year Results, the first interim dividend payment for the quarter ended 30 June 2017 will be 7.52 pence per share, a 3.0% increase on the comparable period last year. The first interim dividend will be paid on 10 November 2017 to shareholders on the register at close of business on 6 October 2017 and will be a Property Income Distribution. The Company will not be offering a SCRIP alternative with this dividend.