Interim Management Statement

RNS Number : 6309Y

British Land Co PLC

28 January 2014

 



THE BRITISH LAND COMPANY PLC INTERIM MANAGEMENT STATEMENT

British Land today publishes its Interim Management Statement for the quarter to 31 December 2013

Chris Grigg, Chief Executive said: "We have had a good third quarter and the business is performing well. Overall, the UK property market had a strong quarter with London strengthening further and domestic and international investment spreading out into the regional markets. We continued to take advantage of the increase in investor demand to sell selected assets. At the same time, we have continued to leverage our deal and property skills to secure value accretive transactions.

From an occupational perspective, we saw increased interest in our office space in London, notably in the City. In retail, the economic recovery is having a positive impact on confidence and we continued to benefit from retailers looking to take space in the best quality locations. We are moving forward with our new development programme, including starting on site at Clarges, and are successfully completing our 2010 development projects. Finally, we were very pleased to establish a new joint venture at Broadgate with GIC and have already started working with them to deliver our exciting vision for the estate."

Improving operational performance in Offices and Retail

·    Like-for-like occupancy up 30 bps to 97.1%; overall occupancy including recently completed developments at 96.5%¹

·    525,000 sq ft of lettings/renewals in Q3²: investment lettings/renewals 5.3% ahead of ERV

·    386,000 sq ft of Retail lettings/renewals driving UK Retail occupancy up 40 bps to 98.4%¹; investment lettings/renewals 3.3% ahead of ERV; administrations low at 0.2% of total rent; footfall outperforming benchmarks

·    139,000 sq ft of Office lettings/renewals with encouraging interest from a broad range of new and existing occupiers; investment lettings /renewals 6.8% ahead of ERV

Continuing to take advantage of investment market strength to reposition retail portfolio

·    £405 million of sales since the end of the half year (£122 million since the half year results) including sale of Eastgate Shopping Centre Basildon for £89 million, ahead of valuation; £200 million of further disposals under offer/in the market

·    £196 million of acquisitions completed or exchanged since the end of the half year (£126 million since the half year results)

·    £83 million investment in high quality Sainsbury superstores and sale of smaller food stores to further focus on highest quality locations

Completing 2010 developments and progressing £1.1 billion recently committed/near-term projects

·    2010 London programme 70% pre-let or under offer; nearly 80% of the residential units sold/pre-sold by value delivering residential profit on cost of over 30%

·    Marble Arch House completed in November; Leadenhall on track for completion in June 2014

·    On site at recently committed projects: Clarges Estate and The Hempel

·    Progressing near-term pipeline: initial design and master planning underway at 4 and 5 Kingdom Street, Paddington Central; Shoreditch Estate feasibility studies ongoing, planning submission expected in Autumn 2014

Financial position remains strong

·      Proportionally consolidated LTV lower at 41.8% (based on September valuations), reflecting asset sales

·     Third quarter dividend confirmed at 6.75 pence³, 2.3% ahead of prior year

Notes

1.   Change in occupancy vs 30 September 2013

At 31 December 2013	LFL Occupancy	Change	Underlying Occupancy	Change
Retail	98.4%	+40 bps	98.4%	+40 bps
Offices	94.8%	+10 bps	93.2%	-160bps
UK Total	97.1%	+30 bps	96.5%	-30 bps

2.   Investment Leasing Activity

To 31 December 2013	3 months %
UK Lettings & Renewals vs. ERV:
- Retail	+3.3
- Offices	+6.8
- Total (including Other)	+5.3
UK Rent Reviews vs. previous rent:
- Retail	+4.4
- Offices	+0.0
- Total (including Other)	+3.1
UK Retail Footfall (year-on-year growth):
- British Land Retail	-0.1
- Experian Index	-3.2

3.   Dividend

The third interim dividend payment for the quarter ending 31 December 2013 will be 6.75 pence per share, a 2.3% increase on the comparable period last year. The third interim dividend will be paid on 2 May 2014 to shareholders on the register at close of business on 21 March 2014. The current issued share capital (excluding Treasury shares) is 1,003,545,451 ordinary shares of 25p each. An announcement on the availability of the split between PID and non-PID income along with the availability of any scrip dividend alternative will be made no later than 4 business days before the ex-dividend date of 19 March 2014.

4.   Change of auditor

Following a competitive tender process, the Board has recommended the appointment of PwC as Auditors to the Group for the financial year starting 1 April 2014. The appointment is subject to shareholder approval at the AGM.

Investor Conference Call

British Land will host a conference call at 9am today, 28 January 2014.  The details for the conference call are as follows:

UK Toll Free Number:                             0800 279 4977                                      

UK Number:                                          [phone]

Passcode:                                             2870920

A dial in replay will be available later in the day and the details are:

UK Number:                                          [phone]                                                                     

Passcode:                                             2870920

For Information Contact

Investor Relations

Sally Jones, British Land                                    020 7467 2942

Media 

Pip Wood, British Land                                       020 7467 2838

Gordon Simpson, Finsbury Group/                       020 7251 3801

Guy Lamming, Finsbury Group

Forward-Looking Statements

This release contains certain "forward-looking" statements reflecting, among other things, current views on our markets, activities and prospects.  By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may or may not occur and which may be beyond British Land's ability to control or predict (such as changing political, economic or market circumstances).  Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements.  Any forward-looking statements made by or on behalf of British Land speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared.  Except to the extent required by law, British Land does not undertake to update or revise forward-looking statements to reflect any changes in British Land's expectations with regard thereto or any changes in information, events, conditions or circumstances on which any such statement is based.

About British Land

British Land is one of Europe's largest Real Estate Investment Trusts (REITs). Through our property and finance expertise we attract experienced partners to create properties and environments which are home to over 1,000 different organisationsand receive over 300 million visits each year. Our property portfolio is focused on the UK, in prime retail locations and London offices which attract high quality occupiers committed to long leases. We have total assets in the UK, owned or managed, of £17.1 billion (British Land share £11.2 billion), as valued at 30 September 2013. Our occupancy rate is 97% and average lease length to first break of 11 years.

UK retail assets account for 59% of our portfolio, around 80% of which are located at prime out of town sites. Comprising around 26 million sq ft of retail space across 67 retail parks, 87 superstores, 16 shopping centres and 12 department stores and 77 leisure assets, the retail portfolio is modern, flexible and adaptable to a wide range of formats. Our active asset management delivers space which is attractive and meets the needs of both retailers and consumers.

London offices, located in the City and West End, comprise 39% of the portfolio, which will rise to an estimated 43% on completion of current committed developments. Our 7 million sq ft of high quality office space includes Regent's Place and Paddington Central in the West End and Broadgate, the premier City office campus (50% share).

Our size and substance demands a responsible approach to business. We believe leadership on issues such as sustainability helps drive our performance and is core to the delivery of our overall objective of driving shareholder value.

Further details can be found on the British Land website at www.britishland.com

 

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