British Land has continued to the feel the affects of the challenging retail market after it posted a drop in half-year profits and revenues.
The property giant posted a 2.9 per cent year-on-year drop in net asset value, while underlying profit fell 14.6 per cent year-on-year to £169 million and net rental income fell by £30 million to £267 million.
British Land chief executive Chris Grigg blamed the half-year performance on the challenges that continue to plague the retail market.
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Meanwhile, the firm’s portfolio value slid 1.9 per cent overall, thanks to a 4.5 per dent drop in retail valuations.
Occupancy increased marginally over the half-year period to 97.8 per cent, but the weighted average lease length dipped to 6.9 years.
Earnings per share also dropped 10.4 per cent to 17.2p, although the company declared an interim dividend of 15.5p, up three per cent year-on-year.
However, British Land planned to cut its retail assets from about 50 per cent of the portfolio to between 30 per cent to 35 per cent over the next five years, making around £2 billion worth of disposals.
“In a particularly challenging retail market, we remained focused on delivering operationally day-to-day while at the same time progressing our strategy and refining our portfolio,” Grigg said.
“With £634 million of retail assets sold or under offer in the last 12 months, we have sold a total of £2.8 billion since April 2014.
“We expect retail to remain challenging in both the occupier and investment markets as the impact of long-term structural change is compounded by short-term headwinds.”
British Land operates Meadowhall shopping centre in Sheffield, For Kinnaird centre in Edinburgh, and London’s Ealing Broadway Broadgate and Paddington Central.
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