British Land swings to £42m loss as challenging retail market hits portfolio value

British Land has swung to a £42m pre-tax loss as its retail portfolio value fell 4.5 per cent due to the “challenging” market.

The FTSE 100 property company, which owns shopping centres, supermarkets, high street stores, offices and residential properties, said its retail portfolio fell £307m to £6.3bn in the first half of the year.

It reported robust results in its offices portfolio with 5.8 per cent like-for-like rental growth due to the success of its London office space.

The company said it was looking to trim its retail portfolio, having sold £2.4bn of retail assets in recent years, and boost its residential and office portfolio.

Chief executive Chris Grigg said: “In a particularly challenging retail market, we remained focused on delivering operationally day-to-day while at the same time progressing our strategy and refining our portfolio.

Grigg said the company had found tenants for its office space in London quicker than expected and on better terms.

“Looking forward, demand for the highest quality London office space is expected to continue, but we remain alert to potential uncertainties as the Brexit process unfolds.”

“British Land's destination shopping centres may be faring better than the wider high street, but they are still feeling the squeeze as footfall and sales fall,” Nicholas Hyett, analyst at Hargreaves Lansdown, said.

“Fortunately British Land's London portfolio is faring better, despite pessimism around the capital's future after the UK leaves the EU – the mixed campus developments are doing particular well,” he added.

Shares rose almost four per cent following the results.