British Land Q1 2016/17: We had a good quarter of activity in the lead up to the referendum

London, 2016-Jul-19 — /EPR Retail News/ — Chris Grigg, Chief Executive said: “We had a good quarter of activity in the lead up to the referendum. In the short period since, we are pleased to have exchanged on the sale of Debenhams, Oxford Street and completed further lettings across the Office and Retail portfolios. It is too early to properly assess the impact of the referendum result on the markets in which we operate but we do expect some occupiers and investors to take a more cautious approach. British Land has entered this period of post-referendum uncertainty in a robust position. We have a strong, resilient business with a clear strategy.”

Activity since EU referendum

  • Exchanged contracts for the sale of Debenhams flagship store on Oxford Street for a price of £400 million.
  • 17 long term Retail leases totalling 58,000 sq ft have exchanged on terms agreed prior to the referendum at 9.5% ahead of ERV.
  • The Leadenhall Building is now fully let with Kames Capital and MS Amlin completing on a further 20,000 sq ft.

A robust quarter of letting activity leading up to the referendum

  • 256,000 sq ft of Retail lettings and renewals, 14.8% ahead of ERV; a further 240,000 sq ft under offer.
  • Retail footfall is flat for the quarter, outperforming the benchmark by 260 bps; retailer sales up 0.2%, outperforming the benchmark by 50 bps.
  • 25,000 sq ft of Office lettings and renewals, 3.8% ahead of ERV, including letting of the final floor at Marble Arch House at £100 psf; a further 51,000 sq ft under offer.

Retail focus on multi-let portfolio

  • £499 million non-core disposals exchanged since year end including Debenhams, Oxford Street.
  • £99 million Retail disposals during the quarter, including £79 million of superstores, 3% ahead of March 2016 valuations.

Continued progress on modest committed development programme

  • Speculative development commitments represent 4% of the portfolio.
  • Achieved practical completion of 48,000 sq ft of office space at Clarges Mayfair in June.
  • At Paddington Central, 4 Kingdom Street topped out with 147,000 sq ft of office space scheduled for practical completion in April 2017; phase two of public realm improvements is now underway

Resilient business, strong financial position

  • Modern portfolio with wide range of quality occupiers.
  • 99% occupancy and weighted average lease term of 9 years to first break.
  • Pro-forma for exchanged disposals, proportionately consolidated LTV reduces to 29.7% (March 2016: 32.1%) with weighted average interest rate of 3.5% (March 2016: 3.3%).
  • Based on current commitments, the Group has no requirement to refinance for four years.
  • First quarter dividend confirmed at 7.30 pence, 3.0% ahead of prior year.

Forward-Looking Statements

This release contains certain “forward-looking” statements reflecting, among other things, current views on our markets, activities and prospects. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may or may not occur and which may be beyond British Land’s ability to control or predict (such as changing political, economic or market circumstances).  Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements.  Any forward-looking statements made by or on behalf of British Land speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared.  Except to the extent required by law, British Land does not undertake to update or revise forward-looking statements to reflect any changes in British Land’s expectations with regard thereto or any changes in information, events, conditions or circumstances on which any such statement is based.

Notes to Editors:

About British Land – all figures as at last valuation date of 31 March 2016
We are one of Europe’s largest publicly listed real estate companies. We own, manage, develop and finance a portfolio of high quality commercial property, focused on retail locations around the UK and London offices. We have total assets in the UK, owned or managed, of £20.0 billion (of which British Land share is £14.6 billion) as valued at 31 March 2016. Our properties are home to over 1,200 different organisations ranging from international brands to local start-ups. Our objective is to deliver long term and sustainable total returns to our shareholders and we do this by focusing on Places People Prefer. People have a choice where they work, shop and live and we aim to create outstanding places which make a positive difference to people’s everyday lives. Our customer orientation enables us to develop a deep understanding of the people who use our places. We employ a lean team of experts, who have the skills to translate this understanding into creating the right places, and we have an efficient capital structure which is able to finance these places effectively.

Retail assets account for 50% of our portfolio. As the UK’s largest listed owner and manager of retail space, our portfolio is well matched to the different ways people shop today. We are focused on being the destination of choice for retailers and their customers by being the best provider of spaces and services. Comprising over 20 million sq ft of retail space across multi-lets, superstores, department stores and leisure assets, the Retail portfolio is modern, flexible and adaptable to a wide range of formats.

Our Office and Residential portfolio, which accounts for 48% of our portfolio, is focused on London.  We have an attractive mix of high quality buildings in well managed environments and a pipeline of development projects which will add significantly to our portfolio. Increasingly, our Offices are in mixed-use environments which include retail and residential elements. Our 7.5 million sq ft of high quality office space includes Regent’s Place and Paddington Central in the West End and Broadgate, the premier City office campus (50% share).

The remaining 2% of our portfolio is at Canada Water where we have a 46 acre redevelopment opportunity in our medium term pipeline.

Our industry-leading sustainability strategy is a powerful tool to deliver lasting value for all our stakeholders. By supporting communities, improving environments and growing economies, we create Places People Prefer and enhance long term returns.

In April 2016 British Land received the 2016 Queen’s Award for Enterprise: Sustainable Development as part of Her Majesty The Queen’s 90th birthday honours. The Award is the UK’s highest accolade for business success and is given to companies which bring major economic, social and environmental benefits through their own business success.  It was awarded to British Land for continuous achievement in all these areas over the last five years.

Further details can be found on the British Land website at www.britishland.com.

For Information Contact:

Investor Relations
Jonathan Rae, British Land
020 7467 2938

Media
Pip Wood, British Land
020 7467 2838

Gordon Simpson, Finsbury
020 7251 3801

Guy Lamming, Finsbury

Source: British Land