27th Jan 2015 13:17
LONDON (Alliance News) - British Land Co PLC on Tuesday reported a strong performance for its retail property business which boosted its rental values in the third quarter, with occupancy rising and the group saying it remains on track with its development pipeline.
The FTSE 100-listed property company said it secured 269,000 square foot of retail lettings and renewals in the quarter, with investment lettings and renewals in the period 10.9% ahead of estimated rental value. Retail footfall was up 1.3% in the quarter, with retailer same-store sales in its properties rising 4.4%.
Rental growth in its office business was more subdued, the company said. It secured 168,000 square foot of lettings and renewals in the quarter, with lettings and renewals coming in 0.4% ahead of estimated rental value.
In total, British Land's completed lettings and renewals came in 5.4% ahead of estimated rental value.
British Land said its underlying occupancy was 97.8% at December 31, up from 97.1% at the end of September. Retail occupancy was flat at 98.6% but office occupancy rose to 96.7% from 95% at end-September.
The group has completed GBP900 million in asset sales in the year to date, including residential sales. It has made GBP365 million in residential sales in the year to date, primarily from its Clarges Mayfair development in central London, where it said sales reached GBP259 million in the nine months to the end of December, including GBP32 million in the third quarter.
British Land said the Leadenhall Building in the City of London, known as the Cheesegrater, is now 70% let or under offer, with 93,400 square foot placed under offer since the start of the third quarter. It added the Broadgate Circle scheme next to Liverpool Street Station will launch in April, with the 5 Broadgate building on track for completion in June.
The group said it is on track with its 4 Kingdom Street development in Paddington and expects to be on site by February. Planning permission has been submitted for its Blossom Street project in Shoreditch and for the 100 Liverpool Street development in Broadgate, and British Land expects the refurbishment work at the 338 Euston Road development in north London to start in the summer.
The group said its proportionally consolidated net debt was slightly lower at the close of the third quarter, down to GBP4.5 billion from GBP4.7 billion at the end of September. Its loan to value was at 35% based on September 2014 valuations, it said.
British Land also confirmed its third quarter dividend at 6.92 pence per share, up 2.5% on last year.
"It's been another good period for our business: we are leasing well, making progress with developments and have continued to take advantage of strong investment markets to recycle capital," said British Land Chief Executive Chris Grigg.
Shares in the company were down 0.1% to 832.00 pence on Tuesday early afternoon.
The solid results are in line with those published last week by bigger FTSE 100 peer Land Securities PLC, which said it was boosted by rising rental values in London caused by a shortage of new office space.
Land Securities reported GBP886.4 million in property sales in the nine months to the end of December, boosted by GBP701.6 million of sales made in the third quarter.
By Sam Unsted; [email protected]; @SamUAtAlliance
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