Fighting talk from British Land
Post Date: 22 May 2012
A marginal rise in the net asset value of British Land over the past quarter was down to gains in office developments, the company claimed, as the mixed fortunes of Clinton Cards and Sheffield's Meadowhall continued to tell a contradictory tale.
Lucinda Bell, finance director, said that of the amount of space let to occupiers in administration, about half was already under offer to be relet, and that, across its retail portfolio, British Land had noted the seventh consecutive quarter of rental growth.
Clintons plans to close 350 stores, including the whole of the Birthdays chain, while British Land insists that demand from retailers to occupy its shopping centres remains robust despite the uncertain economic environment.
Chris Grigg, chief executive said: "It is about quality. People still want to come to the best place in the area, whether that is a retail park or a regional shopping centre like Meadowhall."
British Land owns half of Meadowhall shopping centre in Sheffield, as well as retail parks such as Glasgow Fort. In the past year it has struck letting deals with retailers such as Next and H&M.
Of another British Land asset, the London office development nicknamed 'the Cheesegrater', Bell added: "We are continuing to see encouraging occupier interest in the remainder of the building – during the last few months, we have responded to four requests for proposals which total over 300,000 sq ft."
A spokesperson admitted that retail, which represents 61% of its portfolio, has had a difficult year, hit by the "twin impacts of austerity at home and the debt crisis in Europe".
Increasing the leisure and food elements on schemes had been a central part of its strategy. There had also been a deliberate increase in the pace of development activity in retail to take advantage of a shortage of high quality space, triggered by a lack of development finance.
That included project starts at Whiteley, a 302,000 sq ft out of town shopping centre and a 45,000 sq ft leisure extension at Glasgow Fort.
Grigg said: "We outperformed the broader UK commercial property market on almost all key measures and our balance sheet is strong.
"I am particularly pleased by our high level of leasing activity and development progress over the period.
"Our results also show we are defensively positioned in today’s more challenging markets, but also well placed to continue to outperform in the future, as a result of the decisions we have taken."
Net asset value at the end of March was 4.9% higher than the year-earlier figure of 567p, reflecting a 0.4% increase in its UK retail portfolio over the full year.