Shares update: British Land vs Landsec on results week
All eyes were on British Land and Landsec this week as the two biggest REITs in the UK reported their full year results.
Although both companies ended the week below where they started, British Land was the clear winner. Solid NAV growth of 5.7% alongside considerable leasing activity and a total accounting return of +8.9% all led to a 2.3% jump on the day (slight dips throughout the rest of the week, however, dampened British Land’s overall performance).
By contrast, Landsec reported a fall in NAV (for a second consecutive year) to 1,403p, while total returns came to +2.1%. The company was down 1.9% on the day of its results and down 1.7% overall last week.
All eyes were on British Land and Landsec this week as the two biggest REITs in the UK reported their full year results.
Although both companies ended the week below where they started, British Land was the clear winner. Solid NAV growth of 5.7% alongside considerable leasing activity and a total accounting return of +8.9% all led to a 2.3% jump on the day (slight dips throughout the rest of the week, however, dampened British Land’s overall performance).
By contrast, Landsec reported a fall in NAV (for a second consecutive year) to 1,403p, while total returns came to +2.1%. The company was down 1.9% on the day of its results and down 1.7% overall last week.
The race to the top
Performance among the three FTSE 100 REITs – Landsec, British Land and SEGRO – has diverged dramatically since the last round of results.
Landsec has flatlined and is below its share price at the end of September. The other two have steadily been moving up, although SEGRO, the industrial specialist, has been the clear outperformer.
As a result, Landsec is getting dangerously close to losing its title as the UK’s largest REIT. Back in November, its market cap was 15.4% above British Land’s and 33.9% bigger than SEGRO’s. Now, its lead is down to 3.5% and 8.6%.
Other results last week
Crest Nicholson had by far the sharpest drop last week – and one of the most dramatic one-week movements this year from a company not named Hammerson or intu – at -14%.
The housebuilder issued a trading statement saying that rising construction costs and flat house prices have forced a squeeze on earnings. It warned that its operating margins would be at the low end of its 18-20% guide and down from 20.3% from last year.
Grainger also released its results with plans to double the size of its portfolio in the next three years.
In retail, the latest CVAs sent further shudders throughout the sector, which was down 3.8%. Intu fell 5%, NewRiver fell 4.6% and Hammerson fell 1.8%.
The FTSE 100 was up 0.7% and the FTSE 250 was up 1.4%, compared to the property average of -1.1%.
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