British Land Company PLC Benefits From Swelling Office Space Demand

The shares of British Land Company (LSE: BLND) got a small boost following early trade this morning, adding 6p to 668p after it revealed like-for-like occupancy is growing year on year.

The FTSE 100 member confirmed its like-for-like occupancy increased to 97.1% during the third quarter ended 31 December, not including new developments. This comes as there is increased interest in its office space in London as the UK benefits from economic recovery.

British Land added that its retail portfolio has seen £405 million in sales since the end of the half year, including the sale of its Eastgate Shopping Centre in Basildon ahead of valuation for £89 million.

Today’s statement also revealed that the property development pipeline is strong, with Marble Arch House completed in November, and Leadenhall on track for completion in June. Initial planning is underway at numerous other sites.

Chris Grigg, British Land Company’s chief executive, said:

“We have had a good third quarter and the business is performing well. Overall, the UK property market had a strong quarter with London strengthening further and domestic and international investment spreading out into the regional markets. We continued to take advantage of the increase in investor demand to sell selected assets. At the same time, we have continued to leverage our deal and property skills to secure value accretive transactions.”

Prior to today City experts were predicting the company’s upcoming annual results to show earnings equivalent to 32p per share and a dividend equivalent to 27p.

Following this morning’s price movement the shares may therefore trade on a P/E of 21 and offer a possible income of 4%.

Of course, whether those ratings, today’s management statement as well as the wider prospects for the real estate sector combine to make British Land a ‘buy’ right now remains your decision.

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> Mark does not own shares in British Land.