British Land's (BLND) half-year results were boosted by a turnaround in the market for shops. Having fallen 1.5 per cent during the year to 31 March, the company's retail portfolio - which consists mainly of retail parks, shopping centres and supermarkets - rose by 1.5 per cent during the six months to 30 September.
The division bucked the ongoing market trend of falling rents, but also - crucially - benefited from a market-wide surge in investor confidence. This not only buoyed the value of its standing portfolio, but also helped it offload some less desirable assets. The biggest of these was a shopping centre complex in Aberdeen, which British Land owned jointly with stock market peer, Land Securities. Finance director Lucinda Bell cites the "availability of capital" as the key driver of the regional recovery, pointing out that asset manager F&C is using a punchy 75 per cent mortgage to pay for the £189m Aberdeen mall.
The company still sees most scope for development in London. It is currently in the final stages of completing a number of office schemes started in 2010 (most notably the Leadenhall Building, Regents Place and the UBS office at Broadgate), and in July "replenished" its pipeline by buying the Paddington Central office estate for £470m - its largest acquisition since 2005.
Broker Morgan Stanley expects adjusted net asset value (NAV) per share to rise from 623p to 634p by the March year-end.
BRITISH LAND (BLND) | ||||
|---|---|---|---|---|
| ORD PRICE: | 619p | MARKET VALUE: | £6.21bn | |
| TOUCH: | 618.5-619p | 12-MONTHHIGH: | 660p | LOW: 506p |
| DIVIDEND YIELD: | 4.3% | TRADING PROP: | £242m | |
| PREMIUM TO NAV: | 1% | |||
| INVESTMENT PROP: | £8.63bn* | NET DEBT: | 81% | |
| Half-year to 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 572 | 109 | 12.6 | 13.2 |
| 2013 | 611 | 422 | 43.0 | 13.5 |
| % change | +7 | +287 | +241 | +2 |
Ex-div: 8 Jan Payment: 14 Feb *Including £2.68bn within joint ventures | ||||
