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 shrugs off £1.4bn value hit

A bullish British Land has said it will ride out the conditions that saw it mark down the value of its property portfolio by 8.9 per cent, but warned that rivals may not be so fortunate.

The developer, which is behind some of the largest office schemes under construction in the City of London, has been forced to slash £1.4 billion from the value of its properties because of a downturn in the commercial sector caused by the global credit crunch.

But this week head of developments Nigel Webb said the downturn will not affect progress on projects it currently has on site.

Mr Webb said rival developers might be masking their true financial position and would consequently feel the pain.

He said: “There will undoubtedly be development casualties in the current downturn. I think some of the people who say they are going to build out may not do so because they are facing cost inflation.

“They are also finding it hard to raise the debt and the economics are looking worse than they did 12 months ago”.

British Land’s major projects under way include the £286 million Leadenhall Building being built by Bovis Lend Lease and the £220 million Rope-maker Place scheme managed by Mace.

Elsewhere in the capital Mr Webb said the firm was anticipating securing planning permission for North East Quarter from Camden Borough Council in north London within the next three months. This is a mixed-use scheme of 38,000 sq m of offices and more than 170 residential units.

Mr Webb said no decision had yet been taken about whether to proceed with the scheme once planning had been given but that the firm was minded to do so.

He added that a planning application for the redevelopment of Euston Station will be submitted in mid-2009 with work set to start in 2010.

A 22-storey tower designed by Rogers Stirk & Harbour at 4 Broadgate in the City will be submitted by January next year.

Outside the capital, Mr Webb said British Land will submit designs by architect Hamilton Associates for the £160 million redevelopment of the NatWest Tower in Birmingham next month.

Analysis: It’s all a bit more obvious at the top of the game

By Alasdair Reisner

There are two ways to view the announcement by British Land that it has had to write down more than £1 billion from the value of its property holdings.

You might wonder where it all went wrong, why the firm seems to have been hit harder than its rivals by the credit crunch.

The other way of looking at it is that British Land’s position near the top of the development sector as one of property’s most watched stocks means it is, by necessity, quicker to hold its hands up and admit a problem when one occurs.

If head of developments Nigel Webb is right - and similar comments from John Armitt and David Fison elsewhere in this issue predicting slackening in the London commercial sector suggest he may well be - the industry should brace itself for bad news.

Less transparent developers will have to face up to financial reality and pull the plug on a series of projects across the capital.