British Land NAV dips 3% in Q2

UK property firm British Land said its net asset value per share dipped 3% in the second quarter to end-September, wiping out first-quarter gains and leaving net asset value per share unchanged at 1682 pence for the first half. The total value of the company's property portfolio dipped by 1.9% in the second quarter, due to a 2.9% drop in retail property values.

Underlying pre-tax profit was up 18% at £67 mln (EUR 94 mln) in the second quarter, and up 10% at £143 mln for the six months to end-September. Dividend for the second quarter was 8.75 pence per share, taking dividends for the first half to 17.5 pence, more than treble the amount for the year-earlier period. The company said its previously announced £250 mln share buyback is underway and it had purchased £125 mln by end-September.

British Land and nine other large UK property companies converted to real estate investment trust (REIT) status in January 2007. Since then, the share price for UK REITs have plummeted. In British Land's case from a year high of 1,722 pence per share to 913 by the midday on 15 November. The company's property portfolio is valued at EUR 22.6 bn.

'We entered the property market correction with significant positives - a strong balance sheet, 100% fixed interest rates, and among the highest occupancy rates and lease lengths in our industry. Customer focus and our activist strategy are helping us outperform at the rental level and we firmly believe that an investment in British Land offers clear value. However, more than one quarter is likely to be needed to complete the market correction which may well be uneven in timing and across participants,' CEO Stephen Hester said in a statement.

On Wednesday, Land Securities, British Land's main peer, confirmed that it plans to split into three separate listed companies: retail, London and outsourcing. Land Securities has seen the value of its shares plummet some 30% this year