A strong update and the planned reinstatement of the dividend helped lift UK commercial property investor British Land (BLND) 4.5% to 383.7p and provided a boost to several of the UK’s beleaguered property stocks.
Its close peer Land Securities (LAND) was up 3.5% to 571p while retail specialist Hammerson (HMSO) gained 6% to 18.8p thanks to the positive picture presented of British Land’s retail assets.
The company said it would resume dividends falling improved rent collection in September with footfall in its shopping centres improving as lockdown restrictions eased.
Dividend payments would be resumed and be paid semi-annually at 80% of underlying earnings a share, and the company intended to declare interim dividend on this basis in November, the company said.
As at 8 October, the company collected 69% of the total amount of rental income due, comprising 91% of offices rent and 50% of retail rent. This compared to the collection rate of 36% for retail reported in the week after the June quarter date, the company said.
'In a similar manner to the June quarter, we expect September quarter rent collection to improve further over the coming weeks,' the company said.
FOOTFALL RECOVERS
In September, footfall was 84% of the same period last year, which represented a continuation of the consistent improvement in footfall seen since the re-opening of non-essential retail in June.
Like-for-like retail sales in September for stores that were open were 90% of the same period last year, the company said.
Rent collection for the June quarter stood at 74% as the company continued active discussions with its retail occupiers about the payment of rent.
AJ Bell investment director Russ Mould said: ‘As an investor in many different types of commercial property British Land is a good bellwether for UK real estate.
‘This is why its positive trading update, with rent collection trending in the right direction, and the decision to reinstate the dividend, is firing shares in several of the London market’s property stocks on Friday.
‘Particularly notable is the recovery in retail - with figures suggesting footfall and sales across its portfolio of shops and shopping centres weren’t too far off pre-Covid levels in September.
‘The company has also managed to sell some retail assets above book value - though it looks like these are in more robust areas of retail like large standalone DIY stores.’
