Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

British Land profits rise despite tough retail climate

British Land saw pre-tax profit increase by 5 per cent in 2011 despite a difficult year for retail.

The developer said underlying pre-tax profit rose to £269 million in the year to March 2012, reflecting £28 million (5.4 per cent) growth in net rental income.

It said 50 per cent of office developments under construction are now pre-let to UBS, Aon and Debenhams, securing £34 million of annual income.

Inusrance giant Aon has taken a 30 per cent pre-let of of the Leadenhall Building - known as the Cheesegrater and won by Laing O’Rourke. This amounts to191,000 sq ft, with an option to take a further 85,000 sq ft.

British Land added:  “We are continuing to see encouraging occupier interest in the remainder of the building - during the last few months, we have responded to four requests for proposals which total over 300,000 sq ft.”

The firm said retail  - which represents 61 per cent of its portfolio - had a difficult year, hit by the “twin impacts of austerity at home and the debt crisis in Europe”.

It said increasing the leisure and food elements on schemes had been a central part of its strategy. It also said it increased the pace of development activity in retail to take advantage of a shortage of high quality space, triggered by a lack of development finance.

That included project starts at Whiteley, a 302,000 sq ft out of town shopping centre and a 45,000 sq ft leisure extension at Glasgow Fort.

British Land chief executive Chris Grigg said: “We outperformed the broader UK commercial property market on almost all key measures and our balance sheet is strong.

“I am particularly pleased by our high level of leasing activity and development progress over the period.

“Our results also show we are defensively positioned in today’s more challenging markets, but also well placed to continue to outperform in the future, as a result of the decisions we have taken.”

The developer has arranged £2 billion (British Land share £1.4 billion) of new financing since April 2011 at an average margin to British Land of 160 bps.

Hercules Unit Trust, the specialist retail warehouse fund managed by Schroder Property and advised by British Land, has signed a new £350m five year loan facility provided by Lloyds TSB.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.