British Land is to buy back £300m of its own shares after concluding this offers better value than spending its cash pile on land and properties.
The UK’s second-largest listed property company sold its 50 per cent stake in London’s “Cheesegrater” skyscraper earlier this year for £575m as part of the sale of the whole building to Chinese buyers.
It said on Tuesday it had also sold another £135m of assets and received offers on £88m since May.
Announcing the buyback plan, Chris Grigg, chief executive, said:
This rolling buyback programme reflects our commitment to seeking the best long-term returns for shareholders.
We continue to see strong demand in the investment market, which makes opportunities to acquire new standing assets, at attractive returns, more limited than usual. With our shares trading at a substantial discount to NAV [net asset value] and providing a 5 per cent dividend yield, allocating capital into a share buy-back represents a clear value opportunity.
British Land’s shares have been trading at a discount of about one-third to net asset value, according to figures from Numis Securities.
Other listed companies in the sector have also been trading at big discounts, in contrast with record-breaking prices in the market for individual buildings.
The company will buy back the shares during its current financial year, which ends in March 2018.