British Land sells some retail properties but stresses commitment to sector
British Land, which counts Meadowhall and Drake Circus among its retail assets, said that it has sold £456 million worth of retail properties since the beginning of the pandemic and is planning to sell more.
Delivering its first-half results, the company was the latest landlord to go public with a revised strategy in the face of the retail crisis and the damage that it has caused to its portfolio.
The overall value of that portfolio dropped from £11.2 billion at the end of March to £10.3 billion six months later with the retail segment of its properties falling 15% to be valued at £3.2 billion.
The company has clearly been hurt, not only by a series of lockdowns, but also by retailers having been struggling for some time and having launched company voluntary arrangements.
In fact, British Land said that in the latest period, while its office tenants had paid 97% of the £48 million they owed in rent, retail tenants paid only 62% of the £64 million they owed.
While those figures show that retail is still a huge part of its operations, it's increasingly looking at its office properties for growth and the retail disposals are part of this strategy.
The company’s results also saw it saying that it would repurpose some retail properties where it wasn't possible to sell them, although it's fortunate that much of its portfolio is focused on retail parks, which have been the most buoyant segment of the UK retail sector. Some properties could be converted to e-commerce warehouse space.
The company reported a pre-tax loss of £757 million for the first half of its financial year, wider than the £444 million loss of a year ago. That came as revenues fell from £328 million to £255 million.
“Our first-half results naturally reflect the challenges in retail,” incoming CEO Simon Carter said. But he added that the company is focused on keeping its key properties occupied by successful retailers.
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