British Land intends to allocate up to £300m of capital to a share buy-back during the current financial year.
In a statement, the company said the decision was due to the opportunity for better returns from investing in the company’s shares than investing in assets.
Chief executive Chris Grigg will tell British Land’s annual general meeting today: “This rolling buy-back programme reflects our commitment to seeking the best long-term returns for shareholders.
“We continue to see strong demand in the investment market, which makes opportunities to acquire new standing assets, at attractive returns, more limited than usual. With our shares trading at a substantial discount to NAV and providing a 5% dividend yield, allocating capital into a share buy-back represents a clear value opportunity.
“With substantial proceeds being realised from our disposals programme, we do not expect any material change in our loan-to-value ratio as a result of the share buy-back. We retain significant resources to develop the pipeline of development opportunities we have created and the flexibility to respond to any changes in market conditions.”
As announced in the company’s full-year results in May, the first interim dividend payment for the quarter ended 30 June 2017 will be 7.52 pence per share, a 3% increase on the comparable period last year.
The first interim dividend will be paid on 10 November 2017 to shareholders on the register at close of business on 6 October 2017 and will be a property income distribution. The company will not be offering a scrip alternative with this dividend.
Watch a tour of British Land’s latest addition to Paddington Central
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