British Land outperforms benchmark

15th Feb 2011 07:05

Real estate investment trust British Land saw a solid increase in underlying pre-tax profit and net asset value (NAV) per share in its third quarter.Underlying profit before tax in the three months to 31 December 2010 was up 10% from a year earlier at £64m. Broker Panmure Gordon had forecast a figure of £65.7m.The group's portfolio at the end of the year was valued at £9.3bn, up 2.3% over the quarter and 13.1% higher than a year earlier. NAV per share rose 4.4% in the quarter to 548p, ahead of Panmure Gordon's forecast of 532p. End-year NAV per share was 25% higher than the end-2009 figure of 438p.Underlying diluted earnings per share (EPS) were 7.0p, up 6% from 6.6p in the third quarter of the preceding year. The third quarter dividend has been maintained at 6.5p."We continued to outperform the IPD (Investment Property Databank) benchmark and delivered good growth in income, valuation and NAV. Looking forward, while the UK recovery is likely to be muted, British Land is well placed to benefit from occupier and investor demand for high quality space in retail and central London offices coupled with an increase in acquisition opportunities at more realistic prices," said Chris Grigg, chief executive of British Land.Estimated rental value (ERV) growth in the group's retail potfolio was 0.4% over the quarter, which compares favourably with the IPD bechmark index, which was down 0.1%. Office ERV growth of 1.4% also beat the benchmark. which was +0.4%.In a separate announcement, the company said it has purchased the leasehold interest in Green Lanes shoppinc centre in Barnstaple for £30m, its second shopping centre purchase in the last three months. The centre is virtually fully let, with 99% occupancy. The purchase price represents a net initial yield of over 8% with the scheme historically trading at investment yields as low as 5.5%, the company said.