British Land increases its 2014 Q2 dividend by 2.5%

DividendMax Ltd.

British Land increases its 2014 Q2 dividend by 2.5%

Chris Grigg, Chief Executive said: "This has been another good six months for British Land with strong results from both parts of our business. Our continued outperformance underlines the success of our actions: increasing our business in London; progressing our major development programme; evolving our retail offer; and buying and selling well. Looking forward, we remain confident about the outlook for the business. The economy is growing, interest rates are likely to stay low for some time and investor demand for quality properties in and outside London is strong.  Demand for offices in London is improving, supply remains constrained and rental growth now looks firmly established. In retail, economic growth is feeding through to consumer spend and the lead indicators of rental growth in our business are all positive."

Strong first half results

Underlying PBT +6.2% to £155 million; IFRS PBT of £1,043 million (H1 2013/14 £422 million)

EPRA NAV +11.8% to 769 pence; IFRS Net Assets at £8.0 billion (31 March 2014 £7.1 billion)

Quarterly dividend of 6.92 pence; bringing the half year to 13.84 pence (+2.5%)

Total accounting return of 13.7% for 6 months (H1 2013/14: 6.8%)

Valuation well ahead driven by strong markets and our own actions

Total portfolio valuation +7.2%; standing investments +6.6%; developments +12.8%

Strong uplift in both sectors: Retail & Leisure +6.0%; Offices & Residential +8.7%

ERV growth of 2.1% across the portfolio, boosted by refurbishment opportunities in Offices 

Continued outperformance vs IPD: all property total returns +50 bps; capital returns +70 bps

Excellent progress on leasing with near full occupancy across the portfolio

606,000 sq ft of Retail lettings and renewals; investment lettings and renewals 8.4% ahead of ERV

Strong and improving Retail operational metrics: footfall up 2.6% (+340 bps vs benchmark); occupancy up to 98.6% (up 20 bps like-for-like); retailer sales +4.4% (same store sales)

507,000 sq ft lettings and renewals in Offices; further 188,000 sq ft under offer; investment lettings and renewals 10.4% ahead of ERV

Office space at Broadgate and Regent's Place fully let; occupancy across the Office portfolio at 95.0% (up 600 bps like-for-like)

Development generating strong profits - well placed to move ahead on near-term pipeline

Around £1 billion of profits generated from the current development cycle (including £800 million from 2010 development programme), with more to go

The Leadenhall Building completed; nearly 60% let/under offer; setting rental highs for the City

£227 million pre-sales at Clarges Mayfair, residential development exposure now below £200 million

Expect to commit to 4 Kingdom Street and submit planning on Blossom Street, Shoreditch in the next few months

On site at five retail extensions adding nearly 350,000 sq ft; agreement on a leisure extension at Drake Circus, Plymouth

Strong financial position with continued access to low cost finance

Proportionally consolidated LTV lower at 36% (31 March 2014: 40%) reflecting valuation increase and asset disposals

Maintaining capital discipline: expect investment activity to be weighted to disposals over the year

Refinanced one of our Tesco JVs at around 250 bps below the rate on the previous loan finance

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