After the royal fanfare that greeted the highly-praised results of Land Securities, British Land didn’t quite manage a headline grabbing Pippa Middleton performance, but neither was it a shunned Sarah Ferguson show. Instead, the UK commercial property investment, management and development company delivered a solid round of figures, competent in a sit-in-Royal-box-and-wave-at-crowds-at-Wimbledon manner. Underlying profits were up 2.8%, at £256m, partly attributed to a focus on retail sites and strong lettings performance.
By 2014, £1.1bn will have been spent on building 2.2m sq ft of Central London commercial property, including the iconic Cheesegrater, which last week announced an agreement to lease ten floors to US insurance giant Aon. British Land expects its strategy of acquiring prime commercial property to literally pay dividends, particularly as demand for Central London office space is anticipated to rise, continuing the trend of the past three quarters.
The UK’s second biggest property company by assets outlined plans to pick up more bank disposals, similar to the £240m purchase of Drakes Circle shopping centre in Plymouth.
The commercial property portfolio currently comprises 99 superstores, 90 retail warehouse properties, 12 shopping centres and 10 department stores. This represents 33m sq ft of space, valued at £9.6bn, up 6.9%. This was less than the previous year’s 13.5%, with analysts citing the slowdown of the commercial property market’s recovery.
Accountants and bankers have been kept busy; over £1.1bn of debt has been successfully refinanced, a £560m unsecured revolving facility with 11 banks has been signed, resulting in an extension of the refinancing requirement (based on projected expenditure) until June 2014. Net debts are slightly above £1.7bn, with an average maturity of 10.7 years.
In some corners of the City, the figures were met with an uneasiness similar to that felt by British diplomats whenever Prince Philip prepares to make a joke. The share price fell 15p and a couple of investment banks downgraded their recommendations from Buy to Hold.
