British Land confident in resilience ahead of Brexit vote

William Turvill
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London Creating 80% Of The Private Sector Jobs In The UK
British Land said London continues to outperform the rest of the UK market (Source: Getty)

British Land said it remains confident of having a good 2016 despite uncertainty over the global economy, EU referendum and new London mayor Sadiq Khan.

The FTSE 100 property giant today reported an increase in underlying profit in the year to 31 March 2016.

The figures

The company’s underlying profit was £363m, up from £313m in the year to March 2015.

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But its pre-tax profits, to international financial reporting standards (IFRS), were £1.3bn, down from £1.8bn in 2015. The firm said this reflected a valuation uplift of £950m, down from £1.6bn in 2015.

The FTSE 100 property giant’s dividend per share increased 2.5 per cent, from 27.68p to 28.36p.

British Land's share price has fallen from nearly 900p last May to 720p now.

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Why it’s interesting

British Land reported “another strong period for the UK property market overall”, despite pointing pointing to a “more challenging macro environment”. It also said decisions are being delayed until after the EU referendum.

It said London continued to outperform the rest of the UK, with performance driven by “rental growth as opposed to the yield compression seen in recent years”.

But British Land noted there is currently uncertainty over the new London mayor's "approach to planning and housing".

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The company said: “The occupational market overall remains favourable although more recently there is evidence that some large occupiers are delaying decisions to take space until after the upcoming EU referendum.”

British Land said it remains confident in the “underlying strength of the business despite continued global macro uncertainty and the potentially adverse impact” of a Brexit.

It said: “Our business is resilient: our portfolio is modern, nearly fully let to quality occupiers on long leases; and our finances are strong with moderate LTV, low costs and long dated financing from a wide range of sources.”

What the company said

Chief executive Chris Grigg:

We have delivered another strong set of results with performance underpinned by strengthening rental growth across our business. We are focusing the business around long term trends and continue to see the benefits of the investments we have made in recent years. While we are mindful of the impact of market uncertainty, our high quality portfolio, flexible development pipeline and robust financial position continue to mean that our business is both resilient and well placed for the long term.

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