Liberty International has scrapped its final dividend after suffering a 41% plunge in its net asset value last year.
The REIT, which owns the shopping centre owner Capital Shopping Centres and the central London investor Capital & Counties, said today in its 2008 annual results that it would restrict the dividend for
2008 to the 16.5p a share interim dividend it had already paid. It said this exceeded the minimum 12.8p a share required under UK REIT legislation. The dividend for 2009 will be maintained at 16.5p a share or the minimum amount, if it is greater.
'This decision has been a particularly difficult one,' said chairman Patrick Burgess.
Liberty is in the process of raising at least £350m of new equity from a sale of shares, which it said was a condition of its banks changing the terms of its £360m corporate facilities.
'Given current market conditions, the board's intention would be to raise a greater sum through a combination of asset disposals and new capital,' said Burgess.
Liberty's gearing ratio increased to 58% at the end of the year, which Burgess described as 'higher than we would like but not unmanageable'.
Liberty had a dismal performance in 2008, with its NAV dropping from 1264p to 745p a share and its share price more than halving to 478p.
The shares have since fallen further and this morning stood at around 333p.
Burgess described the NAV performance as 'disappointing, though it reflects market conditions', adding: 'In fact, our assets are holding up relatively well - a tribute to their calibre and focal position in their communities'.
Liberty's NAV fall was driven by a 22.5%, or £2bn, decline in the value of its portfolio, of which 11.8% came in the fourth quarter.
Underlying pretax profits dropped from £127.7m to £103.3m, largely as a result of an £11.9m fall in like-for-like income from the shopping centres through tenants going into administration and £11.6m of one- off internal reorganisation expenses.