The majority of these debt arrangements in Funds and Joint Ventures include a variety of loan to value cover ratios or covenants, with maximum levels ranging from 55% to 90% (except for one Fund in which we have a small interest where the LTV is 35%) and several of them also have rental income to interest or debt service cover requirements. While there is no obligation on British Land to remedy any breach of these covenants, by way of example, if values of all the properties involved fell by 20% (from September 2008) our share of the total amount required to remedy the resulting loan to value ratios would be in the region of £50 million.

Overall interest cover has risen to 2 times, following the recent sales and repayment of
debt – another positive feature.

The above table shows the cash flow strength of the business despite a further reduction in property values. The Group’s underlying profits have slightly improved (1% increase) on the 30 September 2007 half year, despite the comparative period benefiting from a £16 million dividend from Songbird Estates that did not reoccur this period. Underlying profits excluding this dividend were up by 13% on the comparative period.

Income Statement (data presented on a proportionally consolidated basis – table A)

The Group has continued to be a net disinvestor and this is reflected in the income statement with both rental income and finance costs being significantly down on the corresponding six months in the previous financial year. After the £57m effect of disposals, gross rental income has increased by £19m on the held portfolio reflecting rent reviews and lettings of the investment portfolio and completed developments.

Like for like rental income increased in the six months by 4.2% compared with the corresponding period last year. The Group’s rental income has good long term security with the average unexpired tenant lease length across our property portfolio being 14.7 years to expiry and 13.4 years to first break.