Interim Management Statement

RNS Number : 1842D

British Land Co PLC

27 January 2015

 



THE BRITISH LAND COMPANY PLC TRADING STATEMENT

British Land today publishes its Trading Statement for the quarter to 31 December 2014

Chris Grigg, Chief Executive said: "It's been another good period for our business: we are leasing well, making progress with developments and have continued to take advantage of strong investment markets to recycle capital. Our focus on providing shopping environments which meet the changing needs of today's consumer means we have benefited from growing demand for the right retail space. In Offices, supply is constrained and rents are responding well to strong demand. We are making good progress repositioning Broadgate to appeal to a wider range of occupiers, and we've been particularly pleased with progress at The Leadenhall Building where we continue to see significant ongoing interest." 

Strong occupational performance in Retail and Offices; positive for rental growth

·     269,000 sq ft of Retail lettings/renewals; investment lettings/renewals 10.9% ahead of ERV²

·     Retail footfall +1.3%, continuing to outperform (+260bps vs market)²; retailer same store sales +4.4%

·     168,000 sq ft of Office lettings/renewals completed; investment lettings/renewals 0.4% ahead of ERV²; further 116,000 sq ft under offer, with investment lettings/renewals 8.1% ahead of ERV

·     Tech-related occupiers accounted for 43% of completed Office lettings; 62,000 sq ft to WeWork at 199 Bishopsgate and 11,000 sq ft to Central Working at Crown Place, EC2

Good progress on committed pipeline - key milestones achieved

·     Leadenhall Building 70% let/under offer; 93,400 sq ft let/placed under offer since start of Q3; includes the building's architects, Rogers Stirk Harbour + Partners; recent deals 4.5% ahead of ERV

·     Broadgate Circle launching in April, and 5 Broadgate on track for completion by June 2015

·     £57 million residential sales since the start of Q3, ahead of valuation, including a further £32 million at Clarges Mayfair; £365 million residential sales year to date, including  £259 million at Clarges Mayfair

·     Continued investment in Retail; extensions at Fort Kinnaird (Edinburgh), Broughton Park (Chester) and Deepdale (Preston) totalling 175,000 sq ft, achieved practical completion

Successfully progressing development pipeline

·      On track at 4 Kingdom Street, Paddington Central (145,000 sq ft; total commitment of c. £110 million); expect to be on site next month

·      Planning submitted on Blossom Street, Shoreditch (347,000 sq ft) and 100 Liverpool Street, Broadgate (530,000 sq ft)

·      c.80,000 sq ft refurbishment opportunity at 338 Euston Road, Regent's Place, starting summer 2015

·      Progressing masterplan of 40 acre site at Canada Water

Continuing to recycle capital in strong investment markets

·      Asset sales of over £900 million year to date (including residential sales); accounting for over £30 million of annual net rent

·      Evolving our Retail portfolio to meet changing consumer needs; £220 million of sales ahead of valuation since the start of Q3, including £55 million of superstores sales

Financial position remains strong

·     Proportionally consolidated net debt lower at £4.5 billion (compared to £4.7 billion as at 30 September 2014); proportionally consolidated LTV lower at 35% based on September 2014 valuations (LTV of 32% pro-forma for 2017 Convertible Bond)

·     Weighted average interest rate at 4.2% (proportionally consolidated)

·     Third quarter dividend confirmed at 6.92 pence³, 2.5% ahead of prior year

Notes

1.   Change in occupancy vs 30 September 2014

At 31 Dec 2014	Underlying Occupancy (%)	Change	LFL Change
Retail	98.6	0bps	+10bps
Offices	96.7	+170bps	+180bps
Total	97.8	+70bps	+80bps

2.   Investment Leasing Activity

To 31 Dec 2014	3 months % vs Sept 2014
Completed Lettings & Renewals vs. ERV:
- Retail	10.9
- Offices	0.4
- Total (including Other)	5.4
Rent Reviews vs. previous rent:
- Retail	4.0
- Offices	1.1
- Total (including Other)	2.1
Retail Footfall (year-on-year growth):
- British Land Retail	1.3
- Experian Index	-1.3

3.   Dividend

The third interim dividend payment for the quarter ending 31 December 2014 will be 6.92 pence per share, a 2.5% increase on the comparable period last year. The third interim dividend will be paid on 6 May 2015 to shareholders on the register at close of business on 27 March 2015. The current issued share capital (excluding Treasury shares) is 1,019,726,112 ordinary shares of 25p each. An announcement on the split between PID and non-PID income along with the availability of any scrip dividend alternative will be made no later than 4 business days before the ex-dividend date of 26 March 2015.

Trading Statement Video and Conference Call

A video to accompany this statement will be made available on the British Land website at www.britishland.com from 7.00am today, 27 January 2015, and will be followed by a conference call at 8.15am.  The details for the conference call are as follows:

UK Toll Free Number:                           0800 279 5736                                      

UK Number:                                          [phone]

Passcode:                                             1380038

A dial in replay will be available later in the day, until 9 February, and the details are:

UK Toll Free Number:                           0800 358 7735

UK Number:                                          [phone]                                                                

Passcode:                                             1380038

For Information Contact

Investor Relations

Sally Jones, British Land                        020 7467 2942

Media 

Pip Wood, British Land                           020 7467 2838

Gordon Simpson, Finsbury Group/         020 7251 3801

Guy Lamming, Finsbury Group

Forward-Looking Statements

This release contains certain "forward-looking" statements reflecting, among other things, current views on our markets, activities and prospects.  By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may or may not occur and which may be beyond British Land's ability to control or predict (such as changing political, economic or market circumstances).  Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements.  Any forward-looking statements made by or on behalf of British Land speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared.  Except to the extent required by law, British Land does not undertake to update or revise forward-looking statements to reflect any changes in British Land's expectations with regard thereto or any changes in information, events, conditions or circumstances on which any such statement is based.

About British Land

We are one of Europe's largest publicly listed real estate companies. We own, manage, develop and finance a portfolio of high quality commercial property, focused on retail locations around the UK and London Offices & Residential. We have total assets in the UK, owned or managed of £19.0 billion (British Land share of which is £12.8 billion), as valued at 30 September 2014. Our properties are home to over 1,000 different organisations and receive over 340 million visits each year. Our objective is to deliver long-term and sustainable total returns to our shareholders and we do this by focusing on Places People Prefer. People have a choice where they work, shop and live and we aim to create outstanding places which make a positive difference to people's everyday lives. Our customer orientation enables us to develop a deep understanding of the people who use our places. We employ a lean team of experts, who have the skills to translate this understanding into creating the right places, and we have an efficient capital structure which is able to effectively finance these places.

UK Retail assets account for 54% of our portfolio. As the UK's largest listed owner and manager of retail space, our portfolio is well matched to the different ways people shop today, from major regional shopping centres to single occupier locations. We are focused on being the destination of choice for retailers and their customers by being the best provider of spaces and services. Comprising around 25 million sq ft of retail space across retail parks, superstores, shopping centres, department stores and leisure assets, the retail portfolio is modern, flexible and adaptable to a wide range of formats.

Our Office and Residential portfolio, which accounts for 46% of our portfolio is focused on London.  We have an attractive mix of high quality buildings in well managed environments and a pipeline of development projects which will add significantly to our portfolio. Increasingly, our offices are in mixed-use environments which include retail and residential elements. Our 7.9 million sq ft of high quality office space includes Regent's Place and Paddington Central in the West End and Broadgate, the premier city office campus (50% share).

Our size and substance demands a responsible approach to business. We believe leadership on issues such as sustainability helps drive our performance and is core to the delivery of our overall objective of driving shareholder value and creating Places People Prefer. Further details can be found on the British Land website at www.britishland.com

 

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