Nick Wilson

Property Editor

UK-based Liberty International, which has a significant South African shareholding, yesterday reported a 6% increase in underlying profit before tax to £129m for the year to December.

The company, which also delivered a 10% increase in its dividend per share, said it had “fared extremely well” during a year that had been a difficult one for the UK property market.

But Liberty — which is invested predominantly in prime UK regional shopping centres — did not escape completely unscathed from the fallout in the UK-listed property market, with the share losing about 22% of its value last year.

The company’s net asset value was down 5% and its valuations on its total property portfolio in aggregate were down 3,5%.

Liberty CE David Fischel said the company still fared well relative to the rest of the UK-listed property sector, which lost about 38% of its value last year.

“We were the best performing property share in the UK.

“ It’s a time for quality and the prime shopping centres over the years have shown they are stable and resilient and not as cyclical in nature as secondary property or offices,” said Fischel.

The company said it was still too early to form a view on the length and the breadth of the turbulence now evident in the property market as a whole.

It described last year as a “transitional year” and that, particularly in the second half of the year, investor enthusiasm for UK property “diminished rapidly with negative sentiment abounding as the US subprime mortgage market contagion spread across the Atlantic and credit market conditions deteriorated rapidly”.

Other UK property companies reporting results are also feeling the effects of a difficult market.

British Land, which announced nine-month results last week, suffered a 10% fall in the value of its property portfolio and its net asset value dropped more than 15%.

Fischel said the “good news” for Liberty was that its shopping centres had high occupancy rates of 98,7%. He said the company had also showed like-for-like net rental income growth of 3,5%.

“The main thing is we will focus on our business and make sure our centres stay fully let.”

Fischel said Liberty was in a strong financial position with a debt to assets ratio of 42% as at December 31 last year.

The company has gross property assets of £8,6bn.

“Our debt structures are predominantly long-term, asset specific and fixed-rate,” said Liberty chairman Robert Finch.

Fischel said the company had committed £300m to developments this year.

The biggest portion of this amount was committed to Liberty’s extension of its centre, St David’s, in Cardiff, and Newcastle’s Elden Square.

Fischel said Liberty’s final dividend of 17,6p was being paid as a non-property income distribution. This meant there would be no withholding tax on it for South African investors.

Source: Business Day