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

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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.”

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