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The British Land Company PLC (the 'Company') held its Annual General Meeting ('AGM') at 100 Liverpool Street, London EC2M 2RH earlier today. All resolutions were voted on by way of a poll and were passed by shareholders. The results of the poll are set out below.
Today, British Land will host an asset tour for investors and analysts at Nugent Shopping Park in Orpington.
The event will consist of a presentation from senior management, providing more detail on our strategy for retail parks, the occupational dynamics and investment landscape as well as a tour of the site.
We are the UK's largest owner and operator of retail parks with 8% of the market. Retail parks are the preferred format for a wide range of customers due to the format's affordability, convenience, and omni-channel compatibility. This, combined with limited new supply due to planning constraints, small lot sizes, and market values below replacement costs make retail parks an attractive and liquid investment in the direct market.
British Land is publishing an update ahead of its Half Year results on 13 November 2023.
Simon Carter, CEO, said:
"I am pleased with the continued momentum in the business. Operationally we are seeing strong leasing activity which reflects the exceptional quality of our portfolio and has resulted in our recent upgrade of the expected ERV growth in retail parks. We have also strengthened our balance sheet in the period and continue to actively recycle capital with the disposal of non-core assets ahead of book value. Meta's surrender of our building at 1 Triton Square also enables us to accelerate our plans to reposition Regent's Place as London's premier Innovation and Life Sciences campus."
Operational performance
Achieved 1.2m sq ft of leasing across the portfolio in the first 5 months to 31 August 2023, 13.1% ahead of ERV, with a further 1.1m sq ft under offer, 17.4% ahead of ERV.
Campuses
- 262,000 sq ft of leasing completed 8.2% ahead of ERV, including 64,000 sq ft of Storey leasing, and a further 137,000 sq ft under offer, 10.5% ahead of ERV. In addition, we have 1.7m sq ft in negotiations as demand continues to gravitate to best in class space.
- Meta surrender of 1 Triton Square - one of the two buildings it has leased at Regent's Place - for £149m, received on 25 September 2023. Although this will result in a EPS dilution, post interest savings, of c.0.6p for the six months to March FY24 we are comfortable with current market expectations for FY24 due to better collection of historic COVID arrears than anticipated.
- Secured one of the UK's largest life science lettings this year, 48,000 sq ft of lab and office space at the Priestley Centre, Guildford to LGC, a leading global life science company.
Simon Carter, CEO said:
"We are pleased with the performance in the first half with underlying profits increasing 3% on the back of another strong period of leasing and good cost control. We have seen yields continue to move out, but as we predicted in May, at a slower pace. Rental growth has accelerated, with lettings 12% ahead of ERV, and occupancy remains strong at 96% well above levels in the wider market.
We are benefitting from our decision to pursue a value-add strategy across campuses, retail parks and London urban logistics. These submarkets have the strongest occupational fundamentals and highest rental growth within the office, retail and logistics sectors. We now expect ERV growth at the top end of our previous guidance for FY24.
Whilst in the past 18 months we have delivered good earnings growth, asset values have been impacted by the increase in interest rates. The geopolitical and economic landscape remains uncertain; however, with our portfolio yield now over 6% and an increased likelihood we are approaching the peak in UK base rates we expect the strong occupational fundamentals of our submarkets, together with the differentiated quality of our assets, to reassert themselves as the primary drivers of performance."
FINANCIAL
• Underlying Profit growth of 3.4%
• EPRA cost ratio 14.8% vs 19.5% at FY23
• Underlying earnings per share of 15.2p up 3.4%
• Dividend per share of 12.16p up 4.8%
And later;
DIVIDENDS
Our dividend is semi-annual and calculated at 80% of Underlying EPS based on the most recently completed six-month period. Applying this policy, the Board has announced an interim dividend for the six months ended 30 September 2023 of 12.16p per share. Payment will be made on Friday 5 January 2024 to shareholders on the register at close of business on Friday 24 November 2024. The dividend will be a Property Income Distribution and no SCRIP alternative will be offered.
The Board of The British Land Company PLC ("British Land") is pleased to announce that following a comprehensive selection process, it has appointed William Rucker as Chair Designate. William will join the Board as Non-Executive Director, Chair of the Board and Chair of the Nomination Committee at the conclusion of the British Land AGM on 9th July 2024. William will succeed incumbent Chair Tim Score on that date, when Tim will stand down after five years as Chair and ten years on the Board.
British Land and Royal London Asset Management Property ('Royal London Asset Management') announce the formation of a new 50:50 joint venture ('JV') to accelerate the delivery of 1 Triton Square into a best in class science and innovation building at Regent's Place. The agreement values 1 Triton Square at £385m.
The new JV will combine British Land and Royal London Asset Management's development and asset management capabilities to deliver a world class science and innovation building. The design is highly flexible, offering a mix of fitted and lab-enabled space as well as the potential to incorporate serviced offices to accommodate flexible requirements at the lower levels, whilst retaining best in class office space on upper floors.
In line with its strategy to focus on retail parks and reduce exposure to covered shopping centres, British Land announces that it has exchanged contracts for the sale of its 50% stake in Meadowhall Shopping Centre to its partner Norges Bank Investment Management for £360m. This follows the sale of some ancillary land by the Joint Venture for £7m (British Land share) earlier this year. Together these deals value the entirety of the Meadowhall Estate at £734m, 3% above September 2023 book value.
Proceeds after net debt of c.£200m are expected to total c.£156m. The impact of the transaction on FY25 NTA per share is expected to be negligible and the FY25 EPS dilution is estimated to be 0.6p prior to reinvestment. The transaction would reduce HY24 proportionally consolidated LTV by 2.7ppt. As part of the transaction, British Land will remain as asset manager of Meadowhall shopping centre, for which it will continue to earn fees in line with current terms.
The transaction is expected to complete in July 2024 and the proceeds will be used for general corporate purposes including reinvestment into retail parks.
Simon Carter, CEO said:
"Our strategy of focusing on campuses, retail parks and London urban logistics is delivering.
ERV growth accelerated to 5.9%, exceeding our guidance in all sectors. We outperformed the MSCI benchmark by 300 basis points and values were stable in the second half. Our operational momentum continues with high occupancy, strong leasing and good cost discipline driving Underlying Profit growth of 2%.
We have achieved much this year - the surrender and joint venture of 1 Triton Square, the commitment to 2 Finsbury Avenue following the record breaking pre-let to Citadel, and the sale of Meadowhall are all good examples of our active approach to capital recycling. As a result, 93% of our portfolio is now in our chosen markets.
Although the geopolitical and economic landscape remains uncertain, with a portfolio net equivalent yield over 6%, 3-5% forecast rental growth and development upside, we expect to generate attractive future returns."
And later;
DIVIDENDS
Our dividend is semi-annual, and in line with our dividend policy, is calculated at 80% of Underlying EPS based on the most recently completed six-month year. Applying this policy, the Board are proposing a final dividend for the year ended 31 March 2024 of 10.64p per share. Payment will be made on Friday 26 July 2024 to shareholders on the register at close of business on Friday 21 June 2024. The dividend will be a Property Income Distribution. A Dividend Reinvestment Plan (DRIP) is provided by Equiniti Financial Services Limited which enables the Company's shareholders to elect to have their cash dividend payments used to purchase the Company's shares
idpickering wrote:
DIVIDENDS
Our dividend is semi-annual, and in line with our dividend policy, is calculated at 80% of Underlying EPS based on the most recently completed six-month year. Applying this policy, the Board are proposing a final dividend for the year ended 31 March 2024 of 10.64p per share. Payment will be made on Friday 26 July 2024 to shareholders on the register at close of business on Friday 21 June 2024.
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