British Land exceeded City -analysts’ expectations in its half-year results this week, posting a 7.5% increase in net asset value for the six months to 30 September.
The company’s share price rose by almost 4% following the announcement.
Its strong performance across nearly every metric stood in -contrast to the performance of rival Land Securities last week, which left some analysts disappointed.
A 4.7% increase in the value of British Land’s portfolio to £14.4bn, compared with 3% growth for Land Securities, helped the company post an NAV of 891p. But it was outperformance in rental values that stood out.
New lettings for offices and retail, including those in development, were 5.7% ahead of estimated rental values.
Analysts at JP Morgan estimate that British Land’s rental income will be up by around 3.8% by the end of the 2015 financial year, compared with 0.9% for Land Securities.
A further 720,000 sq ft of British Land’s space is due to see rent reviews in the coming 18 months, with an overall reversion in rents estimated at 10%.
The company is also to deliver 2m sq ft of developments in the “near term”, including 100 Liverpool Street and 2-3 Finsbury Avenue, both EC2.
The company’s debt fell year-on-year to £3.5bn, or 34%, compared with £4.9bn, or 36%, a year ago.
The positive results will allow British Land to pay a half-year dividend of 14.8p per share, up 2.5% year-on-year.
| Item | British Land | Land Securities |
|---|---|---|
| NAV | 891p | 1416p |
| Rental growth | 5.7% | 4.5% |
| LTV | 34% | 26.5% |
| Pretax profit | £171m | £184.2m |
