British Land suffered a 22% plunge in its net asset value in the first half of its financial year but soothed worried investors by revealing no debt, balance sheet or operational problems.

The UK’s second-largest listed property company saw its NAV drop to 1043p a share in the six months to 30 September, driven by a 10.8% decline in the value of the portfolio to £11.57bn. The value drop accelerated in the second quarter – from July to September – to 6.5%.

Underlying pretax profits were up 1% to £144m and the second quarter dividend was raised by 7% to 9.375p a share.

The figures were in line with analysts’ forecasts. ‘These results lack surprises, but in this market we think that is to be applauded,’ said Citi analyst Harry Stokes.

British Land revealed it had no bank covenant issues. Its securitised debt, principally secured on the Meadowhall and Broadgate assets – has only interest cover

covenants; the debentures require asset cover of 1.5 times, but the company can top up the security from its £3bn of unencumbered assets; and the unsecured borrowings have a loan-to-value ratio of just 17%, compared with the covenant of 70%.

It also denied it would need to raise more equity to shore up its balance sheet. Chairman Chris Gibson-Smith said it would only need to raise equity ‘for an acquisition’.

‘While values have been marked down reflecting further softening in prime yields, our high occupancy levels and long leases, plus a diversity of tenants and industries, ensure cash flow security. Coupled with our robust finance structure, these are significant areas of strength,’ said Gibson-Smith.