British Land eyes retail parks expansion after half-year profit rise
Six-month profit inches up 1%
Retail park asset values climb 5.1% by Sept. 30 vs March-end
Office portfolio values decline 1.7%
Shares down about 2% in afternoon trading
Adds CFO comment in paragraphs 1, 3 and 4, share move in paragraph 7, analysts' comment in paragraph 8
By Aby Jose Koilparambil
Nov 20 (Reuters) -British Land BLND.L plans to acquire more retail park assets, its new finance chief said on Wednesday, after the landlord posted a 1% rise in half-year profit helped by strength in that sector.
The FTSE 100 .FTSE firm's increased focus on retail parks helped it to counter valuation weakness in its office-focused portfolio, as the British commercial property market recovers from the post-pandemic freeze.
"If we can exit from the non-strategic parts of our business - whether that is shopping centres or drier London assets - we will free up capital and look to redeploy that into retail parks," CFO David Walker, who took up the role on Wednesday, told Reuters.
Retailers are seeking cost-effective out-of-town space for online operations, driving strong rental growth and valuation hikes at retail parks, CEO Simon Carter said in a statement.
The company said EPRA Net Tangible Assets - which reflects the value of its buildings - had inched up 0.2% to 567 pence by Sept. 30 from its March-end valuation.
The value of its retail park assets, which constitute about a third of the overall portfolio, climbed 5.1% from March-end.
However its office-focused Campuses, which also blend leisure, retail and hospitality facilities, witnessed a 1.7% decline in valuation.
Shares in the company were trading about 2% lower at 1233 GMT.
Panmure Liberum analysts said they were concerned about how the company's adjusted earnings per share will get materially through 30 pence per share over the coming years, given the heavy weighting to the office-focused portfolio.
The company raised its full-year earnings per share forecast to 28.1 pence, up from 27.9 pence, following an accretive 441 million pound ($560.20 million) retail park portfolio acquisition and a share placement last month.
($1 = 0.7872 pounds)
Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Sherry Jacob-Phillips and Jan Harvey
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