Bluewater buy hint at Liberty

LIBERTY International, Britain's biggest out-of-town shopping centres operator, today said that its retailer tenants' trading growth at many of its flagship developments, including Lakeside, has been 'less than robust'.

The comments from chairman Donald Gordon coincided with the admission for the first time that the company would consider investing in the Bluewater shopping centre, along the M25 from Liberty's Lakeside centre.

Chief executive David Fischel said he 'would be interested in taking a look at anything which fits in with our business' including Australian developer Lend Lease's 30% Bluewater stake, which is expected to come onto the market soon.

Gordon said tenants at Liberty's newer centres at Braehead in Glasgow and The Chimes, Uxbridge, continued to 'show powerful year-on-year growth in retail sales figures'. Trading at its other centres has, however, reflected 'the less buoyant statistics for retail sales' .

This includes MetroCentre, Gateshead, which by the time extensions are complete next year will be Europe's largest covered shopping centre at 1.8m square feet.

Liberty's headline profits before tax and exceptional items rose 24% to £62.7m in the six months to June, exceeding analysts' expectations. The shares rose 5p to 632p, 13p short of their five-year high.

Fischel said: 'It has to be remembered we are a retail property company, not a retailer. With voids overall very low and the shopping centres fully let, we are cautiously optimistic.'

Liberty made a further £9.5m of one-off profits in the half-year, resulting from the early termination of long-term interest rate swaps entered into at 'very favourable rates during 2001'.

Liberty's adjusted net asset value increased by 8.5% to 866p a share. Fischel said a large chunk of its profit increase came from improved net property investment income, up £8.6m to £117.7m.

Income including that from joint ventures - largely the Potteries centre in Stoke-on-Trent - rose £8.3m to £183.8m. The group also showed an overall like-for-like revaluation surplus for the six months period of £203m on its property portfolio, an increase of 4.8%.