Offshore Capitalist

UK commercial property market makes comeback

The first quarterly increase in property values since June 2007 is expected to boost British Land’s net asset value by up to 4pc over the three-month period. Land Securities, which does not report quarterly, is likely to show a slight decrease in the value of its portfolio over the six-month period. However the company is expected to report that the value of its portfolio is on the increase.

Harm Meijer, property analyst at JP Morgan, said: “This is the quarter that the market turned the corner. Property values have increased by around 1.5pc, which, when you add in the gearing effect of debt, means an increase in net asset value of 3pc to 4pc.

“We expect the overall tone of both companies to be quite positive. Both have money to spend, although British Land is more likely to move first.”

Analysts’ consensus forecasts show British Land reporting an increase in net asset values (NAV) per share from 350p to 362p over the three months. Land Securities, which will update the market on Wednesday, a day after British Land, is expected to show a fall in NAV per share from 593p to 567p.

The market will also be keen to hear news of acquisitions. British Land recently said it was looking to spend about £1bn in the coming months. Both Land Securities and British Land are understood to be interested in buying Silverburn shopping centre in Glasgow. It is being sold by the administrators of property entrepreneur Paul Green’s Retail Property Holdings for around £250m. It is one of the first major distressed assets to emerge onto the market since the market collapsed two years ago.

via UK commercial property market makes comeback – Telegraph.

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