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• Preliminary announcement - Results for the year ended 31 March 2008

Financial summary:

• Q4 results show underlying profits up; valuation down but at a markedly slower rate than in Q3
  • Underlying earnings per share¹ up 18%; underlying pre-tax profit¹ up 10%
  • Portfolio valuation down 2.2%; net asset value² per share down 4%
• Portfolio valuation down 10.0% for the year
  • Business outperforming IPD (+1.9% on Capital Return²) due to attractive rental growth
  • Portfolio net equivalent yield now 5.6% (92bps higher than March 2007)
• Net Asset Value³ per share 1344 pence, down 20% over the year
  • “Triple Net Asset Value”⁴ per share 1438 pence, down 15%, reflecting valuable debt structure
  • IFRS Net assets £6.8 billion. Properties owned or managed £17.9 billion
• Underlying pre-tax profit¹ up 11% at £284 million for the year
  • IFRS pre-tax loss on ordinary activities £1,609 million (2007: pre-tax profit £1,440million)
• Underlying earnings per share ¹ up 23% at 53 pence for the year
  • IFRS loss per share 303 pence (2007: earnings per share 470 pence)
  • Dividends up 72% at 35 pence per share (Q4 8.75 pence)
  • Next year’s aggregate dividend targeted at 37.5 pence, up 7%

Exceptional balance sheet strength and sector leading income resilience:

• Property portfolio 99% let⁶, 14.7 years average lease length
• Debt 100% fixed rate at 5.29% with 12.9 years average maturity⁵
• £2.4 billion committed undrawn bank lines available

Activist strategy adding value even in tough markets:

• £3.2 billion (gross) sales in the year, at 4.1% net initial yield overall
• Like for like rental income growth of 5.7%, ahead of IPD at 2.5%
• Underlying rental value growth (ERV) of 6.2%, ahead of IPD at 4.0%
• Product quality and location capturing customer demand in both Offices and Retail; 2.4million sq ft of new lettings⁷ and 210 rent reviews settled at 5.7% above ERV
• 745,000 sq ft of City office developments profitably completed, remaining development programme well spaced and benefitting from British Land’s strength

Investment market conditions remain challenging:

• UK real estate prices adjusted fastest to global “credit crunch”; IPD capital values down 14.2% since June 2007 (outward yield shift of 109 bps)
• Decline in property values continues but has slowed in 2008 to date; still a range of possible outcomes
• Increased signs of investor interest at current levels; however, sentiment remains volatile
• Strategic management action ahead of market decline significantly reduced adverse impact on British Land

 

¹ see Note 2 to the accounts (uplift compared to prior year)
² IPD calculate Capital Return (excluding Europe) based on average capital employed and excluding capitalised interest
³ EPRA (European Public Real Estate Association) basis – Note 2 to the accounts
⁴ see Table A
⁵ includes share of Funds and Joint Ventures
⁶ includes accommodation subject to asset management initiatives and under offer
⁷ including development pre-lets

Chris Gibson-Smith, Chairman comments:

In a year of contrasts, profits and dividends rose whilst property valuations fell. It’s a time for cool heads, long-term clarity, a robust business model and ‘business as usual’ for our management team, focused on customers and striving to outperform. Our business principles– prime property, strong customers, long leases, high occupancy and a strong balance sheet – will continue to prove their worth.

Stephen Hester, Chief Executive comments:

In 2007/8 British Land’s portfolio outperformed the property market indices, benefiting from attractive rental growth. Nevertheless values fell, driven by broader market turbulence. We remain in a stressed economic and market environment. However, British Land has never been in better shape to weather the downturn and emerge with growth prospects intact or even enhanced. The anchor of our business – strong, secure cash flow, exceptional balance sheet security – is firmly in place.

Download the full press release as a PDF > (305KB)
Preliminary results - supplementary information PDF > (69KB)
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An interview with Stephen Hester is available at http://www.britishland.com/resultsday.htm.

British Land will host a results presentation at 9.30 am today, 20 May 2008, which will be webcast at http://www.britishland.com/resultsday.htm.

British Land contacts:		Finsbury:
Laura De Vere - Media Amanda Jones - Investors	07739 292920 07921 884017	Faeth Birch/Ed Simpkins	0207 2513801

Notes to Editors:

British Land is the UK’s second largest Real Estate Investment Trust with total assets owned or under management of £17.9 billion, as at 31 March 2008.

The hallmark of the business is a focus on customers, leading to a portfolio of circa 38millionsq ft of investment properties in prime locations around the UK and, a newer activity, in western Europe. Active management of these assets, purchases and sales and an extensive development activity tailor the property holdings to meet the needs of occupiers and the communities of which they form part.

Retail assets account for 57% of the portfolio, 80% of which is in out-of-town locations. Offices account for 41% of the portfolio, of which 98% is in central London. A 4.5 million sq ft office and retail development pipeline complements these holdings. The portfolio has the longest leases (average 14.7 years) and the highest occupancy rates (99%) of the major UK REITs.

The company has recently collected three industry awards: PMA Landlord of the Year, Developer of the Year and Sustainable Developer of the Year.

With sustainability at the core of its business – from community involvement in the planning process, through development, refurbishment and management – the aim is to provide attractive buildings that minimise resource use and meet the needs of occupiers today and tomorrow.