The worst is over, says Peel Holdings chief

THE MARKET responded warmly to an optimistic statement yesterday from Peel Holdings, the property developer that owns 82 per cent of the Manchester Ship Canal Company.

Peel's shares, which have tripled since Black Wednesday, added 23p to 233p after the company announced a big jump in its dividend.

John Whittaker, chairman, said: 'There are now signs of improvement in the property market and it would be reasonably safe to assume that the worst is over.'

However, he warned that recovery was patchy, with interest confined to properties with long leases and good covenants. 'Any overall increases in values will only occur when there is a sustained improvement in the economy,' he added.

Retail warehouses, 17 per cent of Peel's assets, saw values rise by 9.3 per cent in the year to March. Town centre properties were little changed.

But industrial and office properties, especially in the south of the country, continued to show 'substantial reductions' in value and land prices fell slightly.

Peel will learn in October whether it has fought off an appeal against planning permission for a shopping centre of 1 million square feet in Manchester. Permission was granted in March but a High Court appeal was lodged by local authorities, funded, according to Peel, by rival property investors protecting their own interests.

It will also discover in the autumn whether Manchester has won its bid to stage the Olympic Games in the year 2000. Peel owns 70 acres in the proposed Olympic Park at Wigan.

During the year Peel sold pounds 56m of surplus properties at a profit to book value of pounds 3.4m, bringing total sales for the past three years to pounds 265m. As a result of rising property values the programme of sales for the current year has been cut back.

Pre-tax profits rose from pounds 7m to pounds 9.4m. After a pounds 3m tax charge compared with a credit last year of pounds 5.6m, earnings per share fell from 8p to 2.4p. A final dividend of 3p makes a full year total of 4p, up 33 per cent.