British Land‘s retail portfolio up 4.3% in value


One of the UK‘s leading property owners and developers British Land has seen its underlying profit before tax rise by 3.9 per cent year-on-year in its first-half period, it was announced today.

Prime retail assets such as Meadowhall shopping centre in Sheffield and the flagship Debenhams department store on London‘s Oxford Street have helped the real estate giant improve profitability and the value of its portfolio in the six months to September 30th 2011.

The valuation of its UK retail portfolio – which includes warehouses, superstores, shopping centre and department stores – rose 4.5 per cent to £6.01 billion during the period whilst total retail assets increased by 4.3 per cent.

Tough market conditions persist however and despite being insulated from the woes of those operating outside prime real estate, estimated rental value for its UK retail assets rose by just 0.5 per cent compared to the same six months last year.

Chris Griggs, CEO of British Land, said: “In the current challenging economic environment, our results demonstrate the quality of our portfolio underlined by the actions we‘ve taken to focus on growing both income and capital.

“We are well positioned for today but also have the capacity to capture upside when the economy improves.”

Total portfolio valuation, including its office buildings, grew 2.2 per cent to £10.2 billion in the half and the group‘s properties continued to outperform the Investment Property Databank, an industry benchmark, by growing 150 base points ahead in terms of capital return in the period.

Although British Land is in a strong position financially, even it is limiting its investment in major long-terms retail developments whilst the state of the economy remains precarious, a trend seen right across the industry.

Whilst it is investing £583 million in new office constructions with an ERV of £72.3 million, its retail developments pipeline, consisting primarily of extensions of existing schemes, will cost just £65 million to complete.