Published Date: 18 May 2010
BRITISH Land has recorded the first full-year increase in its portfolio value since the UK property bubble burst three years ago, providing a boost for banks that are still troubled by faltering mortgage assets.
The developer of some of the UK’s biggest malls and offices, such as Sheffield’s Meadowhall and London’s Broadgate Estate, said its NAV for the year to March 31 grew 27 per cent to 504 pence a share, trumping a 468 pence consensus forecast due in par t to the impact of gearing.

“In a year of real volatility, we have performed well, reflecting the quality and strength of our portfolio and the actions we’ve undertaken to improve it,” chief executive Chris Grigg said.

“We are focused on the right assets in the right sectors and outperformed versus almost every measure tracked by the IPD, a key indicator of our achievement,” Mr Grigg said.

News of the improved NAV is expected to boost the Lloyds Banking Group and Royal Bank of Scotland, which have been waiting for stronger market conditions to offload troubled property assets with minimal damage to their balance sheets.

British Land’s total portfolio is now valued at £8.5bn, up 13.5 per cent over the year.

A 1.4 per cent like-for-like rise in annual rent suggested business occupiers were becoming more confident about the economy, supporting British Land’s decision to restart plans to build a skyscraper on Leadenhall Street in London’s City financial heartland.

British Land has committed £500m to develop 1.2 million square feet of prime offices and could add another project to the development if Swiss bank UBS agrees to occupy a new headquarters near existing premises at Broadgate.

Average UK commercial property prices have risen by 14 per cent since the market found a floor in August but some investors remain plagued by doubts of a fresh fall in values as much of Europe grapples with deficits and lingering recession.