British Land Profit Rises as Demand for London Offices GrowsPatrick Gower
British Land Co., the U.K.’s second-largest real estate investment trust, said first-half profit gained 6.2 percent after demand grew for offices and shops in London and the south east of England.
Underlying pretax profit rose to 155 million pounds ($243 million) in the six months through September from 146 million pounds a year earlier, the London-based REIT said in a statement today. Underlying earnings per share increased 5.5 percent to 15.3 pence. Net asset value climbed to 769 pence a share from 688 pence a share at the end of March.
British Land and rival Land Securities Group Plc are benefiting from their plan to develop London office buildings during the downturn without first securing tenants. London now faces a 13 million square-foot shortage of office space by 2018, which will force rents up, Jones Lang LaSalle Inc. said in an October report.
“If you look out at the supply and demand imbalance, that runs as far as we can see over the next two or more years,” Chief Executive Officer Chris Grigg said in an interview. “The stronger economy and demand from a variety of occupiers is likely to continue.”
Net income more than doubled to 998 million pounds, or 97.9 pence a share, from 427 million pounds, or 42.8 pence a year earlier as the value of the company’s assets rose and earnings from joint ventures and funds more than doubled.
Engineers are inspecting the developer’s 47-story tower in the City of London known as the Cheesegrater after two steel bolts recently fractured, according to the statement. An investigation is being carried out with the results available in the new year.
The company has made 318 million pounds of residential sales during the period, including 227 million pounds of sales at its luxury development at Clarges Mayfair. More than one of the apartments sold for more than 5,000 pounds per square foot, the most paid for a new home in the district, Tim Roberts, head of offices and residential said at the time.