Real Estate specialist British Land (BLND) said expects to buck the weakening property market by reporting an increase in underlying earnings per share for the second quarter of this year.
Britain’s second-biggest real estate investment trust (REIT) by market value, and the company behind controversial plans to redevelop the NatWest Tower site in the centre of Birmingham, also said it expected the value of its London office and retail property assets in the first quarter of its financial year to be down by more than the 2.2 per cent fall seen in the first three months of 2008.
But the adjustment was likely to be ``well below`` the £1.3 billion mark down in the final quarter of 2007, British Land chairman Chris Gibson-Smith told the company’s annual general meeting.
``In general, prime property valuations in the UK have moved into territory we see as representing long-term fair value.’’ he said. ``However, it is likely that markets overshoot, focused disproportionately on the short-term outlook.
``Increasing investor interest in UK commercial property at these lower pricing levels is evident, but still patchy,’’ Mr Gibson-Smith said.
British Land said total sales in its last quarter were £669 million, including the £400 million sale of the trophy City office, the Willis Building, to the Kuwaiti state fund.
As a result, British Land said it expected to declare a dividend for the quarter of 9.375 pence, seven per cent higher than in the same period last year.
Giving further reassurance to shareholders, Mr Gibson-Smith said the company was in good shape to withstand the market downturn.
“Our prime assets enjoy occupancy rates close to 100 per cent and attractive assured income flows, with lease lengths among the longest in our industry.”
British Land’s debt structure is “exceptional” and interest cover is at its highest for years. The company also has a further £2.6 billion of undrawn credit to draw on, he added.