Press releases
Third quarter report - to 31 December 2007
07/02/2008
Financial highlights:
· Portfolio valuation mark-down of -8.9% for quarter, -8.4% for nine months
- Like-for-like rental value growth at 5.0% for nine months versus IPD Benchmark 3.4%
- Outward yield shift of 53bps overall for the quarter (Offices 51bps, Retail 55bps)
- Portfolio equivalent yield now 5.4%, 74bps higher since March 2007
· Net Asset Value 1 per share 1401 pence, down 16.7% for quarter
- IFRS Net Assets £7.1 billion
- Properties owned or managed £18.4 billion
- “Triple Net Asset Value”2 per share 1437 pence
· Underlying pre-tax profit 3 £72 million for quarter, up 12.5% on Q3 2006
- IFRS loss on ordinary activities pre-tax £1,326 million (257 pence per share, after tax)
· Underlying earnings per share 3 14 pence for quarter, up 16.7% on Q3 2006
- Dividend 8.75 pence per share for this quarter, payable May, in addition to 17.5 pence per share for the first half year (and consistent with 35 pence full year target)
Business resilient:
- Occupancy exceptionally strong, portfolio 99% let4, 14 years average lease length
- £600 million of property sales (gross) since September 2007 at levels supportive of current valuations
- Retail and Office developments with completions in 2007 and 2008 74% pre-let, sold or under offer
- Debt 100% fixed rate at 5.28% average cost and 12.6 years average maturity
- Gearing 45% LTV (49% including JVs/Funds)
- £2 billion committed undrawn bank lines available as opportunity arises
Investment market conditions:
- Outward yield shift of 75bps for IPD Index since March 2007, reflecting investor repricing of risk across the board. Valuation declines largely indiscriminate; should correct for relative value in coming months
- Speed of adjustment of valuations augers well for shortened duration of downcycle
- Encouraging signs of investor interest in property at these levels; however, sentiment still volatile
Chris Gibson-Smith, Chairman comments:
“Macro-economic uncertainty and the global credit crunch have depressed property values. However, the worst should now be behind us, though uncertainties remain on timing and extent of the correction. The exceptional quality of prime property cash flow is again representing clear value. We are optimistic about British Land’s inherent strengths and ability to create value over the course of the business cycle.”
Download the full Q3 2007/08 Press Release > (718KB)
1 EPRA (European Public Real Estate Association) basis – Note 1 to the accounts
2 see Table A
3 see Note 1
4 includes accommodation subject to asset management initiatives and under offer