British Land admitted that prospects for the future are mixed due to the slow recovery of the UK economy, but that certain sectors were remaining profitable.
The REIT has approximately one-third of its expansive portfolio in office space in London, and while the commercial property market elsewhere in the UK is suffering, London office space is still in high demand.
Chris Grigg, Chief Executive of British Land said: “We’ve had an active and positive start to the year.
“The early decisions we made in undertaking our £1.1bn development programme are having a real impact, accounting for nearly a quarter of our valuation improvement.”
However, he added: “We do expect the British consumer to remain under pressure for some time”. He also said that the economic situation in the last couple of months “appears to have worsened”.
Due to London’s continuing status as the world’s premier financial centre, demand for office space in the capital has continued, which has resulted in rents climbing.
British Land is currently planning projects which will eventually add approximately 2.2 million square feet of office space to the London market.
About two-thirds of British Land’s property portfolio is retail, and the average lease length for the company was 11.4 years.
“The pace of capital growth is abating and onward momentum will depend more on the development program and asset management than market movements,” Alan Carter, an analyst at Evolution Securities told Bloomberg.
One of British Land’s premier investments is the so-called Cheesegrater office development at 122 Leadenhall Street. Once completed the building will be 737 feet tall and have 48 floors.
The REIT has approximately one-third of its expansive portfolio in office space in London, and while the commercial property market elsewhere in the UK is suffering, London office space is still in high demand.
Editor’s notes: In June 2023, British Land released its latest annual report. It stated that campuses made up 63 per cent of its portfolio by values – these campuses include Broadgate, Regents Place, Paddington Central and Canada Water – all of these either being office-led or containing office space.
The other 37 per cent of the portfolio is made up of retail parks, shopping centres and London Urban Logistics.
The report indicated £264 million underlying profit in 2023 compared to £247 million in the previous year.
In May 2024, it was announced that the Broadgate Estate which is owned by a 50:50 partnership of British Land and GIC will be welcoming global hedge fund Citadel.
The pre-let deal involved the hedge fund committing to renting 250,000 square feet of office space at the scheme which represents about one-third of the office space in the landmark two-tower development.