British Land sees portfolio rise 8% in value in Q3

British Land saw the value of its total investment portfolio rise by 8.2% to £7.9 bn n the third quarter to end-December. Net asset value increased 18%, reflecting a return to IFRS pre-tax profit of £611 mln. In the same year-earlier period, the London-listed company booked a loss of £1.6 bn.

'Our third-quarter performance saw a continued recovery with strong valuation growth right across the portfolio,' Chief Executive Chris Grigg said in a statement. 'The significant increase in our property valuation reflects the quality of the portfolio and focus on asset management. Our retail estate is virtually 100% let and characterised by prime locations and strong customer relationships.'

Grigg said the company, which is one of London's largest office landlords, is well positioned as London letting activity picks up. 'We have over 250,000 sq ft of space under offer, including nearly 220,000 sq ft to Macquarie, and have over 650,000 sq ft of additional new space available from recent development activity.'

On Monday Europe's largest listed real estate company Unibail-Rodamco reported that hefty declines in asset values pushed its losses for full-year 2009 to EUR 1.46 bn from EUR 1.1 bn the year before. The losses reflect a 35% decline in the value of the portfolio to EUR 2.3 bn compared with EUR. 1.7 bn a year earlier. But the largest listed real estate group in Europe said 2010 would be a 'transition year' on the way to renewed growth.




rise of the During the quarter we commenced the Broadgate JV with Blackstone, an important part of our long-term plan to re-balance the portfolio. We are investing in high quality opportunities such as Surrey Quays, where we can add considerable value, and we expect further attractive assets to emerge over the next 18 months. We’re well placed: British Land combines a prime portfolio, strong income profile, talented people, and significant financial firepower.”


The blue chip investor, one of London's largest office landlords, said its net asset value rose to 438 pence a share in the three months to December 31, above the 425 pence analysts were picking, as demand for commercial real estate rallied.

The value of its total investment portfolio grew by 8.2 percent to 7.9 billion pounds in the period. It reported a 1.4 percent rise in like-for-like rental income compared with the corresponding quarter last year.

"Our third quarter performance saw a continued recovery with strong valuation growth right across the portfolio," Chief Executive Chris Grigg said in a statement.

"We're well placed: British Land combines a prime portfolio, strong income profile, talented people, and significant financial firepower," he said.

The improved valuations will encourage lenders Royal Bank of Scotland (RBS.L) and Lloyds Banking Group (LLOY.L), which are battling to cut property impairments after a 45 percent pricing plunge between June 2007 and August 2009.

British Land and peers Liberty International (LII.L) and Segro (SGRO.L) were among the biggest FTSE 100 fallers on Monday as the market digested news of a slower-than-hoped 0.9 percent rise in average values last month, after a record 3 percent hike in December.

Fears of a "double-dip" in commercial property values loom large over the market following a rapid 10 percent turnaround in values in the second half of 2009, against a backdrop of grim economic forecasts and continued pressure on rents.

Data from the Association of Real Estate Funds (AREF) on Monday showed a record 3.2 billion pounds flooded into unlisted pooled property funds in the final quarter of 2009, but many key investment experts predict a turbulent 2010 for UK real estate.