Broadgate developer British Land posts annual loss as pandemic wipes £2bn off portfolio
British Land posted its third consecutive annual loss as empty shops and offices squeezed the valuation of its portfolio.
The commercial landlord said the value of its portfolio fell 10.8 per cent from £11.1bn to £9.1bn in the year ended 31 March.
It reported a pre-tax loss of £1.08bn compared with a loss of £1.11bn a year earlier.
The structural challenges in retail persist as companies move online, paired with forced closures, and the value of British Land’s retail portfolio plummeted 24.7 per cent. It said the rate of decline is slowing in retail parks while its developments are broadly flat.
The value of its office portfolio dipped 3.8 per cent as companies defer decisions and extend existing leases where they can.
Shares in British Land slipped 2.3 per cent by mid-morning.
Landlords have been among the hardest hit in the property sector as lockdowns and an ongoing moratorium on rent collection have battered valuations.
Last week Landsec and Great Portland Estates posted large annual losses, mainly hurt by a weak performance in their retail portfolio.
““There is no mistaking the challenge British Land is facing. It’s not only being threatened by the rising tide of homeworking, but like a sandcastle, it faces fresh erosion from the heavy spade of e-commerce,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said.
British Land has collected 83 per cent of the year’s rent with 99 per cent in the offices segment and 71 per cent in its retail portfolio.
But it said it had been encouraged by early signs of recovery as lockdown restrictions start to ease. Footfall and sales in its retail portfolio were 99 per cent and 104 per cent of pre-pandemic levels respectively, and 100 per cent and 109 per cent for retail parks.
The FTSE firm expects demand for offices to rebound and it predicts rents to fall by up to five per cent before recovering.
“With supply of the best space tight, we would expect our Campuses to outperform and are encouraged by the conversations we are having on our space, particularly on our development pipeline, as well as the pick up in activity we are seeing at Storey,” chief executive Simon Carter said.