British Land Co PLC Third Quarter Trading Update (2340M)

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RNS Number : 2340M

British Land Co PLC

19 January 2016

British Land third quarter trading update

Chris Grigg, Chief Executive said: "We had another strong quarter: our occupational markets remained robust and we continued to be active in the investment markets. In Retail, our operational performance was good, with outperformance on footfall particularly of note. We continued to sell single-let assets at prices ahead of book value and re-invest in our multi-let portfolio where we see potential to drive further value. In Offices, our portfolio is now virtually full with lettings completed ahead of valuers' assumptions and at Canada Water we agreed Heads of Terms with Southwark Council. Looking forward, while we are mindful that the economic and political outlook is clearly more uncertain since the half year, we are confident in the underlying strength of our business."

Robust occupational demand; completing lettings ahead of ERV

-- 312,000 sq ft of leasing across Retail and Offices; investment lettings/renewals 8.5% ahead of Sept 2015 ERV

-- 290,000 sq ft of Retail lettings/renewals; investment lettings/renewals 7.3% ahead of ERV; over 300,000 sq ft under offer

-- Retail footfall +2.0% (+650bps vs market) with Meadowhall +4.0%; outperformance boosted by investment; retailer same store sales +0.9%

-- 22,000 sq ft of Office lettings/renewals; investment lettings/renewals 11.2% ahead of ERV; a further 46,000 sq ft under offer 10.3% ahead of ERV; reduced volumes reflecting high occupancy

-- The Leadenhall Building now 94% let/under-offer (from 91% at half year) including restaurant unit; recent lettings 10% ahead of ERV and only three floors left to let

Progressing developments and enhancing existing assets

-- At Broadgate, revised planning application submitted at 100 Liverpool St for an enhanced 509,000 sq ft scheme with additional retail space; 2&3 Finsbury Avenue public consultation underway with planning to be submitted in the coming months

-- At Paddington Central, 4 Kingdom Street core topped out and steel frame under construction; phase one of public realm improvements completed; planning approval received on phase two

-- At Canada Water, Heads of Terms for the Development Agreement agreed with Southwark Council and approved by its Cabinet, providing the platform to complete the remaining documentation

-- Achieved practical completion at 29,000 sq ft, Yalding House in the West End (launch Feb 2016)

-- Opening of 58,000 sq ft leisure extension at Whiteley Shopping and 40,000 sq ft flagship Primark store at Fort Kinnaird, Edinburgh; driving strong increases in footfall

Disciplined capital allocation; continued Retail recycling

-- In Retail, continued focus on our multi-let portfolio with GBP207 million of non-core disposals exchanged/completed in the quarter; including GBP94 million of superstores

-- Superstore disposals include Sainsbury's Islington for GBP63 million (BL share GBP32 million); NIY of 3.96% bringing total Retail disposals year to date to GBP406 million

-- Residential sales exchanged in the quarter total GBP20 million (BL share) with pricing in line with September 2015 valuation

Strong financial position

-- Proportionally consolidated LTV at 33% based on September 2015 valuations (LTV of 30% pro-forma for 2012 convertible bond)

-- WAIR reduced by 20 bps to 3.4%; GBP110 million buyback of 6.75% First Mortgage Debenture Bonds key driver

   --     Third quarter dividend confirmed at 7.09 pence, 2.5% ahead of prior year 

Note 1 - Dividend

The third interim dividend payment for the quarter ended 31 December 2015 will be 7.09 pence per share, a 2.5% increase on the comparable period last year. The third interim dividend will be paid on 6 May 2016 to shareholders on the register at close of business on 1 April 2016. The current issued share capital (excluding Treasury shares) is 1,028,740,235 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 31 March 2016.

For Information Contact

Investor Relations

   Sally Jones, British Land                                020 7467 2942 

Media

   Pip Wood, British Land                                  020 7467 2838 
   Gordon Simpson, Finsbury                             020 7251 3801 

Guy Lamming, Finsbury

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.

Notes to Editors:

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. We have total assets in the UK, owned or managed of GBP19.7 billion (of which British Land share is GBP14.4 billion), as valued at 30 September 2015. Our properties are home to over 1,200 different organisations ranging from international brands to local start-ups. 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 finance these places effectively.

UK Retail assets account for 51% 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. 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 22 million sq ft of retail space across shopping 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 49% 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 7.5 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 industry-leading sustainability strategy is a powerful tool to deliver lasting value for all our stakeholders. By supporting communities, improving environments and growing economies, we create Places People Prefer and enhance long-term returns.

Further details can be found on the British Land website at www.britishland.com

This information is provided by RNS

The company news service from the London Stock Exchange

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January 19, 2016 02:00 ET (07:00 GMT)