British Land Sells Four Homebase Stores

British Land has published interim results covering the six months ended 30 September 2024.

Key figures:

• Underlying Profit of £143m up 1%
• EPRA cost ratio 15.3% (FY24 16.4%)
• Underlying earnings per share (EPS) of 15.3p up 1%
• Dividend per share of 12.24p up 1%
• Total accounting return of 2.8% in the period  

Within the publication, the business revealed that it has sold a number of assets, including a 50% stake in the Meadowhall Shopping Centre for £360m (completed in July 2024) and the sale or exchange for sale of four non-core standalone Homebase units for £45m.

The store locations and prices are:

• Homebase Derby - sold for £8m within the reporting period
• Homebase Frome - exchanged; planned sale price of £9m 
• Homebase Feltham - exchanged; planned sale price of £18m
• Homebase Reigate - exchanged; planned sale price of £10m 

Simon Carter, Chief Executive said: “We are pleased the operational and financial momentum in our business continues. Strong levels of leasing ahead of ERV and sustained cost discipline enabled us to grow profits again, despite significant development activity, which will be a key driver of future profit growth. Our values were up 0.2%, with a particularly strong performance in retail parks offsetting residual yield movement in campuses.

"Since April, we have disposed of £456m of non-core assets and rapidly deployed £711m into retail parks, one of our preferred subsectors, given their attractive occupational fundamentals and high occupancy. Since 2021 we have increased our exposure to retail parks from 15% of the portfolio to 32% today. This conviction is paying off, with retailers competing for cost-efficient out-of-town space to support their online operations. This is leading to strong rental growth and valuation uplifts which are outperforming all other subsectors. 

"Similarly, the super prime space we are developing on our campuses is benefiting from a significant imbalance between the demand and supply for new and substantially refurbished space, particularly in the City, where we estimate a shortfall of 5 million square feet over the next four years. This is leading to strong rental growth at the top end of the market. 

"While geopolitical risk remains elevated and there has been some volatility around the recent Budget and US election, British Land’s portfolio is well positioned for the inflection in the cycle. The continued strength of our occupational markets, underpins our guidance of 3-5% rental growth across the portfolio, and our ability to generate attractive future returns."

Source : Insight DIY; British Land

Image :  RMC42 / 1157059063 / Shutterstock.com

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