Mixed results
British Land pleased investors this morning with stronger than expected results for the year to March 31. It said NAV had risen 27% to 504p and its portfolio valuation had grown 13.5% over the year. The group is considering restarting work on its Leadenhall Building project – otherwise known as the Cheesegrater – a Lord Rogers-designed 47-storey office development in the City (artist’s impression here from British Land’s website).
A rights issue and significant reshaping of British Land’s portfolio, which is focused on the out-of-town retail and London office sectors, mean the results are complicated – underlying pre-tax profit was down 7%. But the stock market was pleased by a resilient performance from the group’s properties, with like-for-like rental income up 2.1% (offices income dipped 0.4%) and occupancy rates remaining high at 99% for retail and 93% for offices.
Looking ahead, British Land says it has committed nearly £500m to developing 1.2m sq ft of prime office space. This includes the deal with UBS reported earlier this month but also further projects at Regent’s Place and on Baker Street in the West End. These developments should be completed in 2013 and 2014, the group says, at a time when it expects demand for prime London office space to be strong, and supply limited.
By contrast, shares in serviced offices group Regus have fallen today after the company said in a trading update at its AGM that the UK remained its “most difficult region” and admitted that “the early signs of improvement seen in the first quarter have lost some momentum in a fragile market”. Four-month revenues of £340.7m were below City expectations.
