British Land is “firing on all cylinders” and plans to increase the pace of sales so it can reinvest for growth.
Delivering a solid set of annual results, chief executive Chris Grigg said highlights over the period included its outperformance on three key measures – profits, valuation and net asset NAV, which rose 4.9% to 595p a share in its results to March. Like peer Land Securities, this was ahead of the stock market’s consensus forecast of 589p a share.
However, he said there was no denying that the tough economic environment was putting pressure on the retail sector, which comprises 61% of British Land’s £10.3bn portfolio.
“There is no easy and quick resolution. That makes us careful but not downbeat because our focus on London retail and development delivery helps protect us from the polarisation of the market,” he said.
On disposals, Grigg said: “Recycling is becoming a more important part of our investment strategy with the pace of disposals likely to increase as we seek to more actively redeploy capital into higher returning opportunities.”
West End and residential schemes were both cited as areas of potential growth for the company.
BL’s portfolio rose in value by 2.6% over the 12-month period, despite a slowdown to growth of just 0.4% in the second half of the year. Its net initial yield remained stable at 5.2%.
The main driver was a 7.3% hike in the value of its office schemes and development pipeline, which includes its 50% prelet Leadenhall tower in the City.
Values in its retail portfolio were up a marginal 0.4% as its European assets dropped in value by 5.7%.
