Financial summary

• Underlying earnings per share¹ 27 pence, up 4% (Q2 13 pence, up 8%)
  • Dividend up 7% to 9.375 pence per share for the quarter to September 2008 (payable February 2009) making 18.75 pence for the six months
  • IFRS loss per share 257 pence (Q2 IFRS loss per share 146p)
• Underlying pre-tax profit¹ £144 million, up 1% (Q2 £70 million)
  • Underlying profits up 13% excluding receipt of a Songbird Estates dividend in H1 2007
  • IFRS pre-tax loss on ordinary activities £1,327 million (Q2 IFRS pre tax loss £755m)
• Portfolio valuation down 10.8% (Q2 6.5%)
  • Portfolio net equivalent yield now 6.1% (true equivalent² yield 6.3%), 57 bps higher than March 2008. Gross (top-up)³ initial yield 6.0%
• Net Asset Value⁴ per share 1043 pence, down 22% (Q2 down 14%)
  • “Triple Net Asset Value”⁵ per share 1186 pence (reflects valuable debt structure), down 18%
  • IFRS Net Assets £5.3 billion
  • Properties owned or managed £15.6 billion

Business continues to operate positively under activist customer-led strategy:

• Like-for-like rental income growth 4.2% versus H1 2007, IPD 3.5%
• Rental value (ERV) growth for Retail 0.9%, Offices -4.0% due to City weighting
• Over 900,000 sq ft of new lettings and 113 rent reviews settled in the six months, overall at 2.1% above applicable ERV
• £721 million (gross) additional disposals since March 2008

Balance sheet strength – cash flow security with low cost and long maturity of debt:

• Property portfolio 97% let⁶
• Lease lengths average 13 years with just 4% up for renewal before March 2011
• Debt 100% fixed at 5.3%, 13 years average maturity⁷, £2.7 billion undrawn bank lines

Investment markets reflect turbulent economic conditions:

• Financial market turmoil coupled with febrile economic environment resulting in challenging investment markets with few transactions
• Management actions of recent years have placed the business in good shape

 

Chris Gibson-Smith, Chairman comments:

Against a backdrop of heightened stress in the markets British Land continues to operate well. While values have been marked down reflecting further softening in prime yields, our high occupancy levels and long leases, plus a diversity of tenants and industries, ensure cash flow security. Coupled with our robust finance structure, these are significant areas of strength.

¹ see note 1 to the accounts
² after notional purchaser's costs and based on rents received quarterly in advance (reflecting true cash flow profile)
³ yield to British Land (without notional purchaser's costs) adding back rent frees and contracted rental uplifts
⁴ EPRA (European Public Real Estate Association) basis - note 1 to the accounts
⁵ see Table A
⁶ includes accommodation subject to asset management initiatives and under offer
⁷includes share of Funds and Joint Ventures