British Land property values plummet 11 percent

By Sinead Cruise

LONDON (Reuters) - The rapid property correction has stripped more than a billion pounds off the value of British Land's assets but its portfolio remains almost full as tenants seek refuge from the economic storm in prime shops and offices.

The country's second-largest real estate investor -- seen as a bellwether for property firms -- said the value of its portfolio including joint ventures, sank by 10.8 percent to 11.6 billion pounds in the six months to September 30. Net asset value tumbled 22 percent to 1,043 pence a share.

But as stares recession in the face, more corporate occupiers and retailers are taking space in the firm's landmark shopping centres and office towers, while existing residents continue to pay higher rents for their premises.

"We offer resilience in an otherwise uncertain market," said Chairman Chris Gibson-Smith. "Over the past few years we have reshaped our portfolio to focus on prime property... Our average lease lengths are 13 years with only 4 percent up for renewal in the next three years," he said.

British Land, which owns the Meadowhall shopping mall in Sheffield, northern England and the majority of the Broadgate Estate office complex in the City of London, said its portfolio remained 97 percent let and it had achieved more than 900,000 square feet of lettings in the six months.

It also posted like-for-like rental income growth of 4.2 percent versus the same period in 2007, beating industry benchmarks of 3.5 percent.

Bucking acute stress in London's City financial district, the company said it had provisionally let over a quarter of the office space at its 593,000 square foot Ropemaker Place office development, which is due to complete in 2009.

While the results were in line with estimates, shares were trading 3.1 percent down to 528 pence at 10:58 a.m., lagging a 1.4 percent fall in the FTSE 350 Real Estate Index.