British Land bucks trend

Retail valuation holds up on back of resilient occupancy

British Land defied the gloom surrounding retail with a strong performance across its retail portfolio. In the same week that Landsec had marked down the value of its stake in Bluewater by 11 per cent, BL said its retail values were up 0.3 per cent, with positive ERV growth offsetting yield expansion.

In the year to 31 March 2018 BL leased 1.2 million sq ft of retail space generating £7m in additional rent, with incentives unchanged. At 98 per cent occupancy, the portfolio is effectively full and is outperforming benchmarks on both footfall and sales.

Chief exec Chris Grigg said: “We delivered this strong operating performance in the context of ongoing, long-term structural changes in the market. As online retail grows, many operators are evolving their models to focus on the optimal size, shape and nature of their physical store network. This year, these challenges were compounded by short-term trading headwinds, and several highly leveraged operators with challenged models applied for company voluntary arrangements (CVAs).

“We recognise these trends, and so for a number of years we have been actively repositioning our portfolio to focus on well located, high quality space that reflects people’s changing lifestyles and drives enduring demand for our assets.”

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