Liberty International: 40% fall in net asset value but tenant failures decline

Liberty said the value of its investment portfolio fell 12.4% to about £6.1bn in the six months to the end of June.

This fall was better than the comparable 14% fall reported by Investment Property Databank (IPD).

It said: ‘The fall in investment property values decelerated in the second quarter as yields, at least for prime assets, began to stabilise with the valuation focus now shifting from yields to rental values.’

Occupancy at 98.3%

Its regional shopping centre arm Capital Shopping Centres (CSC) reported occupancy levels had been maintained through the period at around 98.3%, compared to 98.7% at the end of December. It said excluding tenants in administration it has improved occupancy levels due to new lettings.

Covent Garden: 99% full

Capital & Counties, owner of Covent Garden market among other assets, reported its Covent Garden asset saw occupancy rise to 99%, up from December where it was 97%. It said its Bedford Chambers development, where Apple is rumoured to have signed up, will be open in mid 2010.

Its current major development project - St David's 2 in Cardiff – will open on schedule in the autumn. It is 64% let by area, 53% let by income with a further 8% in negotiations.

It has a remaining £172m of capital committed to the project which it is developing in joint venture with Land Securities.

It said tenant failures amounting to more than £30m of CSC's passing rent in the last three quarters will ‘adversely impact underlying earnings, notwithstanding the satisfactory re-letting progress this year.’

But that ‘growth avenues for the group remain considerable with numerous active management and development opportunities within existing CSC centres and our Central London assets to be undertaken when market conditions are appropriate.’

Until it sees an appropriate time to begin any new development opportunities it said its rental income prospects have ‘benefited as the difficult property and economic conditions have sharply curbed further supply of retail space in the UK.’

Patrick Burgess, chairman of Liberty International, said: 'Liberty International's growth over the years has come as much from active management and redevelopment as other factors, and we already have within our existing asset base a number of opportunities of this kind, awaiting appropriate market conditions. Beside the prime nature of our assets, we are recognised as having a highly effective management, the worth of which the last few months have more than proven. We are alive to the changing market and investor environment and in our properties and management team have what we need to answer successfully to new opportunities to the benefit of shareholders. We have positioned the group for market recovery in due course, and believe retail, and thereby prime retail property, is likely to be at the forefront of such recovery.'

The board pledged an interim dividend of 5p.