Login to UKBP
Commercial Property News
British Land announces Q1 loss of £572 million yet shares rise 5% on the news
Shares in commercial property firm British Land rose 5% this morning despite recording a loss of £572m on 'ordinary activities' for the first quarter of 2008, as many analysts now believe that the price is cheap for the quality of the assets.
The firm said its underlying profits rose 8% on the previous quarter, to £74m, but that NAV per share fell 10% to £12.12.
Chief Executive Stephen Hester said this morning that the Richard Rogers designed development known as "The Cheesegrater" at 122 Leadenhall would not meet its initial 2011 completion date, as the company undertakes a cost review of the project. It said it would set a new completion date in order to 'optimise cost and occupational demand'.
Mr Hester said:"If we were to meet our 2011 schedule we would have to begin letting the property in 2010 and we don't believe we would be able to achieve premium rates at this time. We also think we are passing the peak of the contract cycle and steel prices are starting to fall, so we hope to get some of the costs down involved with the building."
"The first phase of work, which involves knocking the existing building is at a advanced stage, but we will review placing of the contract for the development. We have no date for completion, but 2012 is the most likely at the moment."
This figure compares with £76m for the same quarter the previous year, a fall of 2%. It also said the continuing property squeeze meant it had written down the value of its portfolio by 5%, causing its loss per share to reach 111p.
Chris Gibson-Smith, Chairman, said: "These first quarter results demonstrate British Land's resilience in the face of a weak economy and gloomy market sentiment. While values are marked down in a thin market, our prime assets - buildings and customer contracts - provide strength in difficult times and opportunity when the cycle turns."
It said its portfolio was 98% let and it had “substantial capital waiting in the sidelines” ready to take advantage of cheap investment opportunities in the downturn.
It said it continued to press ahead with the rest of its development portfolio, which includes the completion of 201 Bishopsgate in the City of London, and additions to the Sheffield retail centre Meadowhall.
The firm said its underlying profits rose 8% on the previous quarter, to £74m, but that NAV per share fell 10% to £12.12.
Chief Executive Stephen Hester said this morning that the Richard Rogers designed development known as "The Cheesegrater" at 122 Leadenhall would not meet its initial 2011 completion date, as the company undertakes a cost review of the project. It said it would set a new completion date in order to 'optimise cost and occupational demand'.
Mr Hester said:"If we were to meet our 2011 schedule we would have to begin letting the property in 2010 and we don't believe we would be able to achieve premium rates at this time. We also think we are passing the peak of the contract cycle and steel prices are starting to fall, so we hope to get some of the costs down involved with the building."
"The first phase of work, which involves knocking the existing building is at a advanced stage, but we will review placing of the contract for the development. We have no date for completion, but 2012 is the most likely at the moment."
This figure compares with £76m for the same quarter the previous year, a fall of 2%. It also said the continuing property squeeze meant it had written down the value of its portfolio by 5%, causing its loss per share to reach 111p.
Chris Gibson-Smith, Chairman, said: "These first quarter results demonstrate British Land's resilience in the face of a weak economy and gloomy market sentiment. While values are marked down in a thin market, our prime assets - buildings and customer contracts - provide strength in difficult times and opportunity when the cycle turns."
It said its portfolio was 98% let and it had “substantial capital waiting in the sidelines” ready to take advantage of cheap investment opportunities in the downturn.
It said it continued to press ahead with the rest of its development portfolio, which includes the completion of 201 Bishopsgate in the City of London, and additions to the Sheffield retail centre Meadowhall.
Thu, 14th Aug 2008