Property giant British Land suffered a 5.4% fall in net asset value (NAV) while losses plunged further as the woes of the retail sector impacted on the group’s half-year results.
The group’s NAV for the six months to the end of September fell to 856p, while its pre-tax losses jumped from £48m last year to £404m this year.
The value of the company’s portfolio dropped 4.3% to £11.7bn, mainly due to a 10.7% write-down of its retail assets. Its office portfolio was up 0.4% and its development projects were up 4.6%
Underlying earnings per share fell by 6.4% to 16.1p, driven by disposals and a reduction in retail rents. It dividend for the period was 15.97p per share, up 3%.
Chris Grigg, chief executive of British Land, focused on the positives of its development portfolio. He said: “We made further progress on our mixed-use strategy, including a resolution to grant planning for a new urban centre at Canada Water in London. We continue to deliver space that our customers want, with 1.3m sq ft of leasing activity across existing and new space, so occupancy remains high at 97% and developments are now 87% pre-let or under offer generating £63m of rent when fully let.”
On the retail sector, which makes up 40.9% of its portfolio by value, Grigg said: “In a tough market, we have capitalised on opportunities to make retail sales, disposing of £236m of assets ahead of book value. We expect retail to remain challenging, so we’ll focus on driving operational performance and maintaining occupancy.
“We see early signs that some liquidity may be returning to parts of the market, and our focus will remain on thoughtfully progressing our strategy to reduce exposure. In London, we expect the market to remain good, with supply relatively constrained and high-quality space, in well-connected, vibrant parts of town continuing to attract demand from a range of businesses. These dynamics are highly supportive of our campus approach.”
BLND : Retail problems weigh heavy on British Land as NAV falls 5.4% in half-year results