Sales and footfall outperform at British Land properties

British Land posted its third quarter trading update on Thursday, reporting 314,000 sq ft of retail lettings and renewals, which was 8.7% ahead of estimated recovery value, with a further 189,000 sq ft under offer.

The FTSE 100 company said retailer sales for the quarter were up 0.6% year-on-year - outperforming the benchmark by 200 basis points - while footfall for the quarter was down 0.6% year on year, although that still outperformed the benchmark by 220 basis points.

It claimed 51,000 sq ft of office lettings and renewals, in-line with estimated recovery value.

The office property at 7 Clarges Street was now over 80% let or under offer at an average rent of £113 per square foot, in line with pre-referendum ERVs.

Leasing discussions with a wide range of occupiers were progressing across the company’s London campuses, with ten major discussions underway totalling 1.4 million sq ft, the board said.

Enabling works also commenced on the 520,000 sq ft redevelopment of 100 Liverpool Street.

During the quarter, British Land said £119m of disposals were exchanged, including £85m of non-core retail and office disposals 2% ahead of September 2016 valuations.

A £191m retail portfolio sale that was previously announced completed in January 2017.

British Land also claimed £34m of residential disposals were exchanged at 10% ahead of valuation, including sales at Aldgate Place and one further apartment at Clarges Mayfair.

The company talked up its “high quality, diverse” occupier base with 97% occupancy and an average lease length of eight years, as well as speculative development commitment remaining at 5% of the portfolio.

Its proportionally consolidated loan-to-value ratio stood at at 30.5% based on September 2016 valuations, including sales completed post period end, with a weighted average interest rate of 3.3%.

Based on current commitments, the group has no requirement to refinance until 2020.

British Land’s board also declared a third quarter dividend of 7.3p, which was 3.0% ahead of prior year.

“British Land has had a positive quarter reflecting the strong positioning of our portfolio and our engagement with occupiers and consumers,” said chief executive Chris Grigg.

“We have completed over 400,000 sq ft of lettings across the business and are progressing discussions with a broad range of occupiers.”

Grigg said retail footfall and sales growth were continuing to outperform industry benchmarks, with the company making further disposals of non-core assets and residential units ahead of valuation.

“The business is well placed; we remain mindful of potential headwinds going forward."