(Alliance News) - British Land Co PLC on Friday said it will resume dividend payments, with all of its retail assets and 86% of stores now open.
Shares in British Land were up 3.3% at 379.20 pence in London in early morning trading.
The FTSE 100-listed London-based real estate investment trust temporarily suspended its dividend in March given the "unprecedented circumstances" of the Covid-19 pandemic.
"Like many businesses, we continue to face challenges as a result of the Covid-19 pandemic, but we also recognise the importance of the dividend to shareholders. We benefit from the strong financial position we have established over several years, a unique and world-class portfolio of real estate and are reassured by the improving operational performance of our assets over recent months," said British Land.
Consequently, it will be resuming dividends, paid semi-annually rather than quarterly. Dividends will be announced alongside its interim and annual results, with payments made in February and August.
Future dividends are to be paid at 80% of British Land's underlying earnings per share, based on the most recently completed six-month period so as to "reflect the impact of development completions, acquisitions, disposals, and trading conditions as they change over time."
A dividend will be declared on this basis along with its results in November.
All of British Land's retail assets were open, as of October 1, along with 86% of stores. Footfall in September was 84% of the same period of 2019, with like-for-like September sales in open stores at 90% of prior years levels.
Beating wider market, with footfall 21% of benchmark ShopperTrak UK National Footfall index.
In total, 48% of British Land's retail assets are out-of-town retail parks, which has "a key role in retailers' post-lockdown reopening strategies" and where the company is delivering outperformance. September footfall in retail parks was 89% of the period year with like-for-like sales in open stores at 93% of the prior period.
Company voluntary arrangements and administrations across retail market are up since April, with a further 16 occupiers operating under agreed terms on CVAs or administration making up 80 units. Of which, 13 units are closed while 62 have reduced rents and 5 are unaffected. These have resulted in a drop in annualised rents of GBP11.6 million.
London campuses and standalone office buildings have stayed open and fully operational for the last six months but physical occupancy is still low, with physical occupancy levels at British Land's offices reaching 18% of pre-Covid levels in mid-September and staying there. Across its campuses, 65% of retail and food & beverage outlets have reopened.
Thanks to ongoing active talks with retail occupiers over rent payment, rent collection for the June quarter now stands at 74%. Discussions with "customers who have strong businesses but have been disproportionately affected by Covid-19" have typically involves a move to monthly rents, deferrals, and partial settlement of outstanding rent in return for lease extension, reduced incentives, lease break removals, and commitments to additional space.
Before adjustments o support customers, GBP96 million of rent was due for payments at the September quarter, GBP51 million in Retail and GBP45 million in Offices. As of Thursday, British Land had collected 69% of the total amount, 91% of Offices rent and 50% of Retail rent. For comparison, it reported a 36% collection rate for Retail in the week after its June quarter date.
September quarter rent collection is expected to further improve in the coming weeks.
By Anna Farley; annafarley@alliancenews.com
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British Land (BLND)