Nov. 13 (Bloomberg) -- British Land Co., the U.K.’s second-largest real estate investment trust, said first-half profit gained 6.6 percent after the company leased more space.
Underlying pretax profit rose to 146 million pounds ($232 million) in the six months through September from 137 million pounds a year earlier, the London-based REIT said in a statement today. Underlying earnings per share fell 4.6 percent to 14.5 pence after British Land sold stock. Net asset value rose to 623 pence a share from 596 pence at the end of March.
British Land raised 493 million pounds in a share sale in March to spend on acquisitions and development at a time when smaller competitors were struggling to raise money. The value of its developments rose 8.9 percent in the six months through September, according to the statement. U.K. commercial real estate values rose for a fifth straight month in September, according to Investment Property Databank Ltd.
“We’ve re-built our development pipeline,” Chief Executive Officer Chris Grigg said in an interview. “It takes a long time to get buildings ready to develop in London, so we feel there’s a continued opportunity for us and we’ll continue to exploit that.”
The company will seek planning approval next year for a 2-acre (0.8 hectare) site in Shoreditch close to the City of London financial district and plans to start the construction of a luxury-home and office-building project in London’s Mayfair district, he said.
Net rental income climbed to 148 million pounds in the first half from 142 million pounds a year earlier, British Land said.
Yields for the best income-producing U.K. properties are at the lowest in five years, broker Cushman & Wakefield Inc. said in a September report. Yields may fall further because of the amount of capital that buyers have set aside for real estate investments, Grigg said in the interview.
British Land’s dividend for the first half rose 2.3 percent from a year earlier to 13.5 pence.
“We pay out a lot of our profits and as those profits increase, you should expect our dividend to increase,” Grigg said.
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