British Land making progress in tough conditions

Real estate giant British Land said it continued to perform well in the third quarter and saw 'encouraging' levels of demand in spite of tough market conditions.

The company said that in the face of subdued economic growth, weak consumer spending and an increased leave of retailer bankruptcies, occupancy across its UK estate remained high at 97.7% in the three months to December 31st 2012.

Meanwhile, administrations were low at 0.8% of total income (up 20 basis points), though this rose to 1.2% after the end of the period.

British Land also said that it has made "good progress" on its committed office development programme with 62% now pre-let/under offer, 76% in the City.

The company said: "All of our West End projects are on track to reach practical completion this calendar year and our remaining two City offices will complete next year. The success of our West End investment programme means that we are close to achieving a balance between our City and West End offices, a key objective in recent years."

The company has raised its quarterly dividend payment by 1.5% to 6.6p per share.

Cash and committed unused bank facilities totalled £1.6bn at the end of the quarter, slightly lower than the £1.7bn recorded in September.

"The business continues to perform well in markets which remain tough overall. We've continued to see good demand for our properties, which means our occupancy remains high and our developments are now significantly pre-let well ahead of completion," said Chief Executive Chris Grigg.

"While we remain cautious about the near-term environment, we are confident that British Land is not only defensive in today's challenging markets but also well positioned to deliver future growth from existing and new investments."