British Land hosted an upbeat retail investor day yesterday saying both occupational and investment sentiment continues to improve.
The REIT’s management was keen to demonstrate that it is on top of key trends and challenges in the retail market.
Analysts at JP Morgan Cazenove said BL’s move to detail key performance indicators, such as average dwell time, average drive time, and annual frequency at each of its properties is a “strong positive”.
It said: “These data can be used to improve the assets and develop its strategy. The company also added that it is not enough to just be the best provider of space, but also the best provider of services.
“For example, the company is in advanced talks with BT to provide WiFi across the retail parks, and is on the ball with social media, advertising and promotions with retailers.”
BL said its recently opened 320,000 sq ft Whiteley’s in Hampshire has had 2m visitors in the three months since it opened and an estimated £24m of sales in that time.
The company was confident of rental growth at the scheme, which was let at £25-£45 sq ft, but a recent letting was done at £35 per sq ft, and there is competition for remaining units.
JP Morgan has said it believes there is further yield compression to come at the scheme, which is currently valued off a yield of around 6%.
Phase II at the scheme is under way, with plans including a multiplex cinema already prelet to Cineworld, and five restaurants/leisure units on which discussions have already begun with prospective tenants.
It is set to open in 2015. The build cost will be £12m, at a circa 9% development yield on cost and expected profit on cost of more than 25%.
bridget.o’connell@estatesgazette.com
