British Land Profit Rises amid Tough Market Conditions
**”A Good Set of Numbers in What Continues To Be a Tough Market”**
The Times reported on 20 November 2012 that British Land (LON:BLND), the UK’s second-largest real estate group by market value, recorded stable profit growth in the first half of the financial year. Despite the difficult market conditions during the period, the FTSE 100 property company lifted its half-year pre-tax profit by 3.8 per cent to £137 million, or 15.2 pence a share, from 130 million pounds, or 14.6 pence, a year earlier. The London-based real estate group said in its statement yesterday that net asset value (NAV) was little changed at 596 pence a share, representing a 0.8 per cent increase from a year ago and 0.2 per cent over the past six months. British Land also reported that in the six months through to September, net rental income rose by 1.1 per cent at £272 million – a significant increase which lifted the company’s overall performance.
Commenting on the positive interim profit results, British Land’s chief executive Chris Grigg said: “Today we’re reporting a good set of numbers in what continues to be a tough market. Our income, profits and NAV are up on the same period last year and we have continued to outperform the UK property market on all key metrics — rental growth, capital returns and total returns. Our results underline the strength and resilience of British Land’s business.”
Following the announcement, British Land’s shares rose by 45 pence to 519½ pence.
**London Developments on the Rise**
Updating the market on its interim results, British Land also said that it had increased the amount of new development it was undertaking in London to 2.4 million sq ft, with its portfolio split equally between the two central business districts of the City and the West End.
!m[UK Property Group to Sell European Assets and Focus on Its London Portfolio ](/uploads/story/865/thumbs/pic1_inline.png)The company’s CEO Grigg, who is currently overseeing the building of the Cheesegrater skyscraper in the City of London, told The Financial Times yesterday: “Two-and-a-half years ago, we took the view that there was a shortage of development finance in London. The upshot is that, over time, there will be a lack of good quality new buildings, so developing now makes sense.”
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**British Land Eyes European Portfolio Sale**
Unlike its London real estate developments, British Land’s European assets are lagging in terms of performance. The UK property group indicated that is considering selling its £250 million portfolio of European shopping centres, predominantly in Spain and France, and narrowing its business to focus on the expansion of its London portfolio.
CEO Grigg said: “It hasn’t been a particularly pretty picture in Europe over the recent past, but we will hang on to the assets as income-producing property until the market picks up.”
**New Year, New Chairman**
Along with the robust half-year financial performance, yesterday, British Land announced that the company’s chairman Chris Gibson-Smith, who has led the board for the past six years, will step down at the end of December. He will be replaced by senior independent director and City veteran John Gildersleeve, there real estate firm said.
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