FINANCE: British Land has reported strong occupational demand for retail and offices and remains on track to commit to a speculative start at 4 Kingdom Street , W2, this year.
In its interim results for the three months to 30 June the REIT secured 334,000 sq ft of retail lettings and renewals at 3.2% ahead of ERV, while its 112,000 sq ft of office activity was 5.6% of ERV.
Occupancy in the group’s office portfolio – including developments such as its Broadgate Circle scheme – which is 50% prelet or under offer ahead of early 2015 completion – increased by 140bps over the period to 93.5%.
Other lettings included one floor let to Access Industries at Marble Arch House , W1; 18,500 sq ft let to Arrowgrass at 10 Portman Square , W1, and 21,300 sq ft of letting to fill up 30 Brock Street , NW1.
It added that there were still high levels of interest at its City tower, the Leadenhall building , following 13,600 sq ft of recent lettings.
Retail occupancy showed a less significant change, rising only 10bps to 98.6%, with footfall up 2.5% ahead of the national benchmark, which fell 0.8%.
BL said it had continued to take advantage of the strength of the investment market to reshape its retail portfolio, offloading £115m since the start of the new financial year in April.
It said its 357m of superstore sales were completed 7% ahead of valuation; Leamington Spa Shopping Park was sold for £72m, 12% ahead of valuation, and it still had £150m of additional stock for sale or under offer.
The group’s net debt now stands at £4.8bn, with a weighted average interest rate of 4.1%.
It has confirmed a first quarter dividend of 6.92p, which is 2.5% ahead of the previous year.
Chief executive Chris Grigg said: “We’ve had a good start to our new financial year. The occupational and investment markets in London and retail continue to strengthen, while our own actions are also driving a strong performance.
“In retail, we’ve signed a range of attractive leasing deals across our portfolio and the improving investment market has enabled us to continue to make selected retail sales at prices ahead of valuation.
“In offices, our highly successful 2010 development programme is nearing completion with further lettings signed and very pleasing levels of ongoing interest. We’re also moving forward with our new programme of developments and expect to commit to 4 Kingdom Street later this year.”
bridget.oconnell@estatesgazette.com
