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British Land 2015/16 results reveal prime residential slowdown as profit rises

100 Liverpool Street British Land

British Land has unveiled a 16 per cent profit rise in its latest results but admitted to a slowdown in prime residential transactions. 

The developer posted an underlying profit of £363m for the year to 31 March 2016, up from £313m in its previous results.

It also revealed a committed speculative development pipeline of £530m in the near term, equating to 2m sq ft, with a further 7.2m sq ft in medium-term pipeline.

Combined with 629,000 sq ft currently under construction, the company boasts a total of nearly 10m sq ft to be delivered.

Schemes under construction include its prime residential-led project Clarges Mayfair and the 4 Kingdom Street office scheme in Paddington.

However, the developer reported that transactions in the prime residential market had slowed, having been hit by “both increased supply and recent tax changes”.

British Land added that super prime residential market volumes – properties worth more than £10m – had “moderated”.

It also said that been a slowdown in commercial transactions since the turn of the year, “due to heightened global uncertainty and investors’ concerns over the pending EU referendum”.

The firm completed 908,000 sq ft of developments over the financial year, with 5 Broadgate accounting for the lion’s share of this work (710,000 sq ft).

In March, the developer chose Sir Robert McAlpine as its construction partner for the remainder of its Broadgate Campus redevelopment, which will include 1 Finsbury Avenue and 100 Liverpool Street (pictured).

Major schemes in the developer’s medium-term pipeline include the regeneration project at Canada Water. Former Argent chief executive Roger Madelin was appointed to lead the project in February this year.

In retail, British Land submitted a planning application for the £262m mixed-use redevelopment of Eden Walk in Kingston, which will include 562,000 sq ft of leisure, retail, residential and public space.

The developer is also undertaking a public consultation for a 330,000 sq ft leisure scheme at Meadowhall in Sheffield.

The firm said its scheme at Blossom Street in Shoreditch, which was called in by the mayor of London and granted planning consent despite opposition from local groups, is unlikely to start on site in 2016 as originally intended.

Plans will also be submitted for schemes at 5 Kingdom Street, while the firm is awaiting a decision on the redevelopment of 2 and 3 Finsbury Avenue, both in central London.

British Land chief executive Chris Grigg said would be focusing its business “around long-term trends”.

“While we are mindful of the impact of market uncertainty, our high-quality portfolio, flexible development pipeline and robust financial position continue to mean that our business is both resilient and well placed for the long term,” he added.

 

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