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Despite the referendum British Land have seen underlying profit, excluding movements in property values, increased 16.4% to £199m. This was driven by like-for-like income growth of 3.4% and lower finance and operating costs. However, portfolio net asset value (NAV) fell 3% as a result of revaluations.
British Land announced a dividend of 7.3p for the quarter, taking total first half dividend to 14.6p, 3% ahead of last year.
The shares were flat in early trading.
Half Year Results:
The group let 769,000 sq. ft. in the half, on average 11.6% ahead of estimated rental value (ERV). Of this, 60% was in the period after the referendum. This leaves the portfolio 98% let, with an average lease of 9 years.
The value of the group's office and residential portfolio, mostly in central London, fell 3.3% - versus 2.4% in the group's more national retail and leisure portfolio. Retail has seen a further movement towards retail park assets with multiple tenants, following the disposal of £690m of non-core Retail assets. Multi-let now accounts for 76% of the Retail portfolio.
Proportionally consolidated loan to value (LTV) fell 0.5 percentage points to 31.6%, (March 2016: 32.1%), with the weighted average interest rate also falling to 3.2% (March 2016: 3.3%).
Outlook:
Since the referendum British Land has seen continued momentum in Retail but increased caution in Offices. The group believes its high quality portfolio puts in a strong position as occupiers become more discerning. However, the group has said that it will take a cautious approach to speculative developments while the outlook remains uncertain.
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