British Land makes £177m sale and reports gloomy half-year results

British Land has announced the sale of a West End development for £177m, at a 7.6% premium to book value, as well as half-year results.

The group disposed of Clarges Mayfair, which consists of 50,000 sq ft of offices, 15,000 sq ft of retail and 34 residential apartments.

It acquired the site in 2012 and completed a redevelopment in 2017. The office and retail space are fully let, with retail occupiers including Le Comptoir Robuchon, Le Deli Robuchon and a Porsche showroom. 

British Land made the announcement with half-year results, in which it reported a sharp fall in the value of its portfolio.

Its portfolio plunged in value by 7.3% to £10.3bn, led by retail portfolio falls of 14.9%. Its offices were down 3.1%.

The valuation deficit was reflected in a 10.3% fall in its EPRA net tangible assets (NTA) to 693p and an IFRS loss after tax of £730m.

Underlying earnings was down 34.8% to 10.5p, reflecting an increase in provision for reduced rent due to COVID-19. An interim dividend of 8.4p has been declared.

Rent collection across its office portfolio was 97% for the final quarter of the year, while the collection rate on its retail portfolio was 62%.

Rebalancing portfolio

The company sold a further £456m of retail assets since April, 6.7% ahead of book value, bringing total retail sales since 2018 to £1.2bn.

It has also sold £219m of offices in November, including Clarges.

The proceeds will be reinvested into development opportunities, including at Norton Folgate, which is adjacent to Broadgate in the City of London, where it has committed to develop a 336,000 sq ft mixed-use scheme, and Canada Water, near Canary Wharf, where it has secured planning for a 53-acre scheme.

It secured 65,000 sq ft of letting deals in the six months to September 2020, while a further 313,000 sq ft is under offer and a further 361,000 sq ft in negotiations.

Balance sheet

The group has £1bn of undrawn facilities and cash with no requirement to refinance until 2024. Its loan to value (LTV) is 35.7%.

BLND : British Land makes £177m sale and reports gloomy half-year results

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