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Commercial Property News
Liberty loses 14% value in H1 and chairman expects property to continue to fall until the banks become stable
Liberty International, Britain's third-largest real estate investment trust said the value of its property portfolio fell 14% to £7.99 billion in the first half, squeezing its diluted, adjusted net asset value (NAV) per share to 1,095 pence from 1,264 pence a year earlier.Liberty today warned of further falls in property values after announcing a pre-tax loss of £458million in the first six months.
The retail developer - owner of the Lakeside and Covent Garden shopping centres and MetroCentre in Gateshead - said its property assets depreciated in value by £639million in the half year to June 30, compared to a gain on the same basis of £233million in the first six months of last year.
The pre-tax loss in the first period of 2008 was in contrast to a £552million pre-tax profit in the corresponding time a year earlier.
Patrick Burgess, Liberty’s chairman, said the property cycle has still “to run its course” with property values “unlikely to recover until stability returns to the banking sector”. As a result, said Mr Burgess, “the process of falling property values is not yet complete”, while he also warned that he expected a “period of weak consumer spending given current [consumer] confidence levels”.
The bleak outlook from Liberty chairman Mr Burgess sent the group’s shares down nearly 4% today to 932p.
Looking on the bright side, Mr Burgess said that occupancy levels at the company’s UK shopping centres “remained high” , while it was continuing to attract new lettings business in spite of the problems for the UK economy.
Reflecting such positive sentiments, net rental income for the group in the first half rose 8.4% to £194million , from £179million last time. On an underlying basis, excluding property trading, valuation and exceptional items, the company made a pre-tax profit of £57million in the first six months, down 17% on the £69million achieved in the same period in 2007.
The basic loss per share in the first six months was 117.9p, compared to a profit per share of 138p in the corresponding period in 2007. The company is holding its interim dividend at 16.5p , the same as last time.
The retail developer - owner of the Lakeside and Covent Garden shopping centres and MetroCentre in Gateshead - said its property assets depreciated in value by £639million in the half year to June 30, compared to a gain on the same basis of £233million in the first six months of last year.
The pre-tax loss in the first period of 2008 was in contrast to a £552million pre-tax profit in the corresponding time a year earlier.
Patrick Burgess, Liberty’s chairman, said the property cycle has still “to run its course” with property values “unlikely to recover until stability returns to the banking sector”. As a result, said Mr Burgess, “the process of falling property values is not yet complete”, while he also warned that he expected a “period of weak consumer spending given current [consumer] confidence levels”.
The bleak outlook from Liberty chairman Mr Burgess sent the group’s shares down nearly 4% today to 932p.
Looking on the bright side, Mr Burgess said that occupancy levels at the company’s UK shopping centres “remained high” , while it was continuing to attract new lettings business in spite of the problems for the UK economy.
Reflecting such positive sentiments, net rental income for the group in the first half rose 8.4% to £194million , from £179million last time. On an underlying basis, excluding property trading, valuation and exceptional items, the company made a pre-tax profit of £57million in the first six months, down 17% on the £69million achieved in the same period in 2007.
The basic loss per share in the first six months was 117.9p, compared to a profit per share of 138p in the corresponding period in 2007. The company is holding its interim dividend at 16.5p , the same as last time.
Wed, 6th Aug 2008