British Land, a prominent property company in the UK, has returned to profitability despite the challenges posed by the COVID-19 pandemic. Unlike its competitor Landsec, which also reported a successful year, British Land experienced a strong performance across all of its business segments for the fiscal year ending March 31. This turnaround comes after three consecutive years of losses, with the company’s underlying profits reaching £251 million, a remarkable 25% increase compared to the previous year’s loss of £1.08 billion.
During this period, British Land leased almost 4 million square feet of space in its workplaces, retail locations, and fulfillment centers. This is the highest volume seen in the past 10 years, surpassing the estimated retail value. Retail and fulfillment leasing alone accounted for 2.2 million square feet, also the highest volume experienced in a decade and 2.8% ahead of the estimated rental value. The demand for prime, sustainable spaces in London remained strong, providing a significant advantage to British Land’s campuses. Furthermore, the company achieved a total accounting return of 14.8% for the year, driven by a 6.8% increase in the valuation of its portfolio. The value of campuses increased by 5.4%, while retail parks experienced an impressive surge of 20.7%.
British Land specifically highlighted the appeal and cost-effectiveness of retail parks, boasting a vacancy rate of only 2.6%. The company expressed satisfaction with its decision to allocate capital to this segment, as it has witnessed significant valuation increases. Additionally, the warehousing and logistics sector, particularly in London, was identified as one of the most lucrative property sectors. CEO Simon Carter emphasized the strong foundations of urban logistics in the city, given the scarcity of space available. British Land has successfully developed a £1.3 billion pipeline for its urban logistics business within a year.
Looking forward, Carter acknowledged the existing economic and geopolitical uncertainties but expressed confidence due to British Land’s strategic advantage in sectors with pricing power. The company is well-positioned to navigate the challenges and seize opportunities in the market. The favorable performance and outlook of British Land undoubtedly showcase the resilience and recovery of the UK’s thriving property sector.
Useful links:
– British Land Official Website
– Property Week
