British Land share price climbs on bullish Q3 update
British Land’s (LON:BLND) share price rose at the opening bell this morning after the real estate investment trust (REIT) published an upbeat interim trading update. The FTSE 100-listed company said it had experienced a strong third quarter, with a good occupational performance in its retail and offices portfolio and robust rental growth.
In the three months to the end of December, British Land secured 269,000 sq ft of retail lettings and renewals, with investment lettings and renewals in the period 10.9 percent ahead of estimated rental value. Retail footfall was up 1.3 percent in the period, with retailer same-store sales in its properties rising 4.4 percent.
Rental growth in British Land’s office business was more subdued in the quarter, the REIT revealed. It secured 168,000 sq ft of lettings and renewals in the quarter, with investment lettings and renewals coming in just 0.4 percent ahead of estimated rental value.
Third-quarter dividend has been reaffirmed at 6.92p per share — a 2.5 percent increase year-on-year. CEO Chris Grigg said in the group’s statement: “It’s been another good period for our business: we are leasing well, making progress with developments and have continued to take advantage of strong investment markets to recycle capital.” Grigg added that the supply of London office space was ‘constrained’ and as a result “rents are responding well to strong demand.”
Taking advantage of the improving market conditions, British Land sold over £900 million of properties in the past nine months. The company revealed that it had made £365 million from residential sales – including its flagship luxury housing development, Clarges Mayfair – and £220 million from retail property sales.
Underpinned by the robust update, British Land’s share price opened 0.60 percent higher today at 838.00p. According to the Financial Times, the 14 analysts projecting 12 month price targets for the FTSE 100-listed REIT have a median target of 890.00p, with a high estimate of 958.00p and a low of 791.00p. As of 24 January 2015, the consensus forecast amongst 39 polled investment analysts covering British Land has it that the company will outperform the market.