Property Reporter
UK-based property company Liberty International, which has a 50% South African shareholding, yesterday reported an interim ordinary dividend of 12,4p a share as part of positive results for the six months ended June 30 2004.
This represents a 5,5% gain on the 11,75p dividend for the same period last year. Last year's annual payout was 25p a share.
Liberty International chairman Donald Gordon said the company's development programme positioned it to continue a "long-term track record of measured growth".
He said some £280m of committed project expenditure remained to be spent, primarily on the company's Red Mall part of its MetroCentre mall in Newcastle, northeastern England, and the Chapelfield Shopping Centre in Norwich, in the east.
He said the potential for as-yet uncommitted projects amounted to "around a further £1bn".
Speaking from London yesterday, CEO David Fischel said the £1bn programme had a "high likelihood" of taking place.
Liberty International has property assets amounting to more than £5,2bn, and these are weighted in favour of regional shopping centres and other retail properties. The group reported profit before taxation of £67,2m, with an underlying 14,8% increase before exceptional profits .
The company said the sale of the prime waterfront shopping centre Ghirardelli Square in San Francisco announced at the end of June produced the bulk of the exceptional profit of £6,1m.
Colin Young, fund manager of Old Mutual's South African listed property funds, which includes the Old Mutual SA Quoted Property unit trust, said the results were "very solid", and that Liberty International's development pipeline was strong.
He said there should be "further upside to be had from the rent reviews at their major UK shopping centres". These reviews fall due in the next three years.
Young said the outlook for further rental growth seems positive, but that one key risk was that interest rates may continue rise in the UK, hurting retailers.
The Bottom Line: Page 12
Jul 22 2004 07:35:35:000AM Nick Wilson Business Day 1st Edition
Liberty's track record
UK-based property company Liberty International has lived up to its track record of delivering solid results, reporting a 5,5% increase in its dividends to unitholders for the six months to June.
The firm is focused on retail property. Regional shopping centres account for 81% (by market value) of its investment property portfolio. These should weather any UK retail sales market storm.
There is concern, though, that further interest rate increases in the UK will hit retail sales because of indebtedness.
However, Liberty has a safety net. Recently the company's financial director, Aidan Smith, explained that retailers, who pay rent to Liberty, would want to retain their presence in stronger locations, regardless of the fortunes of consumers.
This trend is also apparent elsewhere. When consumer confidence is low in SA, national retailers would opt out of a smaller shopping centre but stay in the better ones. This reasoning puts Liberty at an advantage in a highinterest rate environment with six of its nine completed shopping centres among the UK's top 18 and three in the top 10.
Neels Blom edits The Bottom Line. E-mail to:This email address is being protected from spambots. You need JavaScript enabled to view it.
Publisher: Business Day
Source: Business Day
