FINANCE: British Land finance director Lucinda Bell said the group is “very confident” about its high-end residential scheme Clarges Estate despite signs the market is weakening.
Speaking to Estates Gazette following its interim results, Bell also confirmed it is no longer likely to bring a joint venture partner on board for the 193,500 sq ft Squire & Partners-designed scheme, which will comprise 47 flats.
She said: “I think the word unique is over-used but when I look at Clarges I think we are going to be offering a unique product to the market.”
In terms of bring a partner on board, she added: “When you are getting to the stage when you are starting demolition on a scheme you are at a pretty advanced stage.
“I am never going to say never – there are no sacred cows in our portfolio – but we are certainly not in talks with anyone.”
BL bought the estate from the Sebba family for £129.6m in 2012 and after winning planning consent last year is set to start construction on the £500m development next month.
In respect of commentary from analysts at Jefferies that the residential market seems to be weakening and “the £3,000 sq ft break-even probably looks challenging”, Bell said she was “very confident about the product” and the market will get a full update later in the year.
The firm completed £115m of sales in the quarter, and said it is in the market or under offer on a further £150m and “might do a bit more than” the £300m annual disposals it guided at its full year in May.
In general, Bell said the firm was “doing what we said we were going to do by growing rental income and progressing its developments”.
In its interim results for the three months to 30 June today the REIT said it had 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 – increased by 140bps over the period to 93.5%.
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%.
bridget.o’connell@estatesgazette.com
