Shopping centre owner British Land Company PLC (LON:BLND) posted a 10.5% drop in 2019 underlying profit as a struggling retail sector led to store closures.
Underlying profit fell to £340mln in the year to March 31 from £380mln a year ago.
READ: British Land, Landsec subside as Barclays eyes more retail property weakness
Net rental income fell to £532mln from £576mln last year, largely due to a £14mln impact from retailers entering company voluntary arrangements – a form of insolvency that allows businesses to shut stores and reduce rents to avoid collapse.
The value of the group’s portfolio declined 4.8% with retail down 11.1%, offices up 1.1% and developments up 10.8%.
To offset the impact of a weaker retail market, the company has sold £1.5bn of assets since April 2018.
British Land proposed a full-year dividend of 31p, up 3% on last year’s payout. It plans to lift the dividend by 3% again in fiscal year 2020.
"Looking ahead, retail is likely to remain challenging as structural change continues but there are early signs on parts of our portfolio, that some of the short-term operational headwinds impacting retailers are easing,” said chief executive Chris Grigg.
“We expect the London market to remain active, as occupier demand for the highest quality space continues to be firm and supply is relatively constrained.
“We are mindful of the ongoing Brexit uncertainty, but our business is well positioned and financially strong.”
Shares were little changed in early trading at 560p.