British Land share price: Property group releases half-year update

British Land share price: Property group releases half-year update

Real estate investment trust British Land (LON:BLND) has released its first-half results.

**Highlights from the company’s statement:**
Strong first half results:
· Total accounting return of 9.1% for 6 months to 30 September 2015 (H1 2014/15: 13.7%)
· EPRA NAV +7.5% to 891 pence per share; IFRS Net Assets at £9.3 billion (31 March 2015: £8.6 billion)
· Underlying PBT +10.3% to £171 million; IFRS PBT of £823 million (H1 2014/15: £1,043 million)
· Quarterly dividend of 7.09 pence; bringing the half year to 14.18 pence (+2.5%)

Valuation growth reflecting robust markets and our initiatives:

· Total portfolio valuation +4.7%; standing investments +4.5%; developments +8.5%
· Strong uplift in Offices & Residential +8.2%; continued growth in Retail & Leisure +1.8%
· ERV growth of 2.3%; strengthening in Offices and positive in Retail
· Continued outperformance vs IPD: all property returns +10 bps; capital returns +30bps

Strong operating metrics; letting space on good terms:
· 573,300 sq ft of leasing across Retail and Offices; 5.7% ahead of ERV; total occupancy of 98.4%
· 365,100 sq ft Retail lettings and renewals; 6.6% ahead of ERV; further 326,600 sq ft under offer
· 208,200 sq ft Office lettings and renewals; 5.0% ahead of ERV; 41,500 sq ft under offer 12% ahead of ERV
· Retail footfall +1.9% (300 bps ahead of market); retailer sales +3.3%

Allocating capital to our strongest assets:
· Net investment of £172 million into London and the South East; acquisition of One Sheldon Square, Paddington Central and investment in development more than outweighing sales (includes 39 Victoria Street, SW1); increases London and South East weighting to 65%
· On site at £825 million committed developments; includes Clarges Mayfair and 4 Kingdom Street, Paddington Central; further £80 million Retail capital spend
· £258 million of non-core Retail disposals, including £60 million post period end; investing in our multi-let portfolio to drive performance

Creating opportunities which significantly enhance the scale of our assets:
· 535,000 sq ft moved forward to the near-term development pipeline
· Progressing the Broadgate Vision; planning granted on 100 Liverpool Street and resolution to grant planning consent received at 1 Finsbury Avenue; advancing plans on 2-3 Finsbury Avenue
· 230,000 sq ft of leisure extensions to retail assets including Drake Circus, Plymouth and New Mersey Shopping Park, Speke
· Progressing medium-term opportunities including Canada Water

Strong financial position; maintaining capital discipline:
· LTV reduced to 34% in line with strategy of not gearing up on market yield shift
· WAIR reduced 20 bps to 3.6%; issue of zero coupon £350 million convertible bond the key driver
· Maintaining capital discipline with selective acquisitions in strong markets
Chris Grigg, Chief Executive said: “We are reporting another strong set of results. In recent years we have positioned our portfolio to benefit from long-term macro trends. This focus has underpinned our performance in the last six months where we have benefited from strong occupational demand and a sound UK economy. Moreover our high quality portfolio and attractive and flexible development opportunities, position us well for the future.”

By Tsveta van Son
Tsveta van Son is part of Invezz’s journalist team. She has a BA degree in European Studies and a MA degree in Nordic Studies from Sofia University and has also attended the University of Iceland. While she covers a variety of investment news, she is particularly interested in developments in the field of renewable energy.
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