British Land shares rise after Q3 news, boosting Lloyds, RBS and FTSE 100

British Land said the value of its portfolio had increased eight per cent in the three months to the end of December.

The company also said that it made a pre-tax profit of £611 million in the quarter, compared with a £1.6 billion loss the year before. Underlying pre-tax profit fell from £63 million to £58 million.

Like for like rental growth was reported as being 1.4 per cent from the third quarter of 2008/09. British Land said it would be paying a quarterly dividend of 6.5 pence per share.

Chris Grigg, Chief Executive of British Land, said, “Our third quarter performance saw a continued recovery with strong valuation growth right across the portfolio. The significant increase in our property valuation reflects the quality of the portfolio and focus on asset management. Our retail estate is virtually 100% let and characterised by prime locations and strong customer relationships. Our office portfolio is well positioned as London letting activity picks up. We have over 250,000 sq ft of space under offer, including nearly 220,000 sq ft to Macquarie , and have over 650,000 sq ft of additional new space available from recent development activity.

“During the quarter we commenced the Broadgate JV with Blackstone, an important part of our long-term plan to re-balance the portfolio. We are investing in high quality opportunities such as Surrey Quays, where we can add considerable value, and we expect further attractive assets to emerge over the next 18 months. We’re well placed: British Land combines a prime portfolio, strong income profile, talented people, and significant financial firepower.”

Mike Prew however, analyst at Normura, was less enthusiastic, saying, “The trading update is rather non-committal, and the economics of near full occupancy remain opaque.

“After the repricing, its back to cashflow fundamentals. Our concern is that the legacy full distribution policy may become one of over distribution post earnings dilutive sales of Meadowhall and Broadgate. The 3Q10 dividend of 6.5p is entirely 'normal' with no PID, so the take-up of the scrip alternative will be more relevant.”

Despite this, British Land’s statement sent its shares up, and also helped push fellow property companies and banks, which lend heavily to the property industry.

By 13:30 shares in British Land were up 3.01 per cent to 451.00 pence per share, Land Securities was up 2.65 per cent to 638.50 pence per share and Liberty International shares rose 1.01 per cent to 451.20 pence per share.