British Land Company, one of Europe’s largest real estate investment trusts, has today announced an increase in footfall and rental values despite uncertainty in the retail property sector.
Rental values rose 1.4 per cent year-on-year across it portfolio of retail sites, while like-for-like (LFL) net rental income grew 0.8 per cent over the full year period to March 31st 2012.
However, there was a significant drop in the overall pre-tax profit over the last year, plummeting 42 per cent from £830 million in 2010/11 to £479 million over the period.
Economic uncertainty stemming from the ongoing Eurozone debt crisis has contributed to this significant decline with the continuing rise in cost of living impacting on consumers, according to the property company.
Chris Grigg, British Land CEO, explained: “We do remain cautious about the overall economic environment which remains difficult; we expect it to remain so with the UK economy growing slowly at best and the Eurozone crisis unlikely to resolve quickly.
“Against this background, we expect property capital values in the UK to be variable in the near term.”
Last week, property firm Land Securities also reported disappointing results, with CEO Robert Noel noting that: “The effects of the structural shift in retail have been heightened by uncertainty in the economy.”
British Land has outperformed its competitors with a footfall increase of 0.3 per cent over the full year compared to the two per cent average decrease in footfall across the rest of the industry, though this represents a marked change on the three percent increase reported in the firm’s Q3 results in February.
The company hopes to turn around these unremarkable results through ongoing relationship-building and has secured multiple deals with existing core retailers H&M , Next and M&S, which will see all three retailers rent units in the new retail development at Whiteley’s shopping centre in Queensway.
Further expansion remains a firm focus as the business continues its investment in new projects in the UK and abroad.
A recent application for 52,000 sq ft to be used as part of a retail development next to its Meadowhall Shopping Centre comes amid plans to complete a new European site by the autumn at Puerto Venecia in Zaragoza.
As such, Grigg remains positive over the resilience of the company’s performance throughout a difficult period.
“Overall, our results show that our business is defensively positioned in today’s more difficult markets: we have a high quality portfolio, secure and sustainable rental income and a strong financial position,” he commented.
“We are also well placed to benefit as the economic environment improves and our decision to increase the quarterly dividend demonstrates our confidence in the Group’s prospects.”