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£1.3bn wiped off the value of British Land s assets |
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HOME >> NEWS >> £1.3bn wiped off the value of British Land s assets |
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 Setbacks in the commercial property market caused by the global credit crunch have wiped £1.3bn off the value of British Land's assets in just three months, the UK real estate giant revealed yesterday.
The real estate investment trust, which specialises in London offices and out-of-town retail parks, announced that the value of its commercial property assets had been marked down by 8.9pc to £14.5bn in the three months to the end of December.
Shares in British Land, one of the UK's blue chips, have tanked by more than 50pc since hitting a record high of 1,722p at the end of December 2006.
With the onset of the credit crunch last summer, and growing fears for the property market, the shares fell as low as 821p in November. British Land chairman Chris Gibson-Smith said: "Macro-economic uncertainty and the global credit crunch have depressed property values.
"However, the worst should be behind us, though uncertainties remain on timing and the extent of the correction."
The other part of British Land's business -- the rental operations -- proved more positive as it posted a 12.5pc jump in pre-tax profits to £72m. Chief executive Stephen Hester said: "The occupier markets from which our cash flows derive remain in better health than investment markets are discounting."
It currently has occupancy rates of 99pc with a 14-year average lease.
Harm Meijer, an analyst at JP Morgan, backed the company despite yesterday's setbacks, the first time in 14 years its net asset value has fallen.
"The results were solid, and management sounded more positive than before. British Land is one of our top picks," he added.
The shares lifted 21p on yesterday's news but retreated with the market to close flat at 962p.
The group also revealed it had a £2bn war chest available "as the opportunity arises".
However, Mr Hester emphasised the company was not actively in talks with targets and added he does not expect major industry consolidation in the near term.
He said: "If there is mergers and acquisitions activity, it will likely be the takeover of private companies in financial distress. We are unlikely to see the takeover of a major public property group."
While the group sold £600m of property in the third quarter, it failed to offload its stake in the Meadowhall Shopping Centre in Sheffield.
The group blamed the credit crisis after it was forced to pull the sale in October.
Source: http://www.independent.ie/ |
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International Corporate Governance
This issue explores how governance attributes are directly related to the substantial variation - across both countries and companies - in ownership, investment and valuation. |
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