British Land reports continued growth in London office rentals

Despite muted recovery in the UK British Land well placed to benefit from occupier demand for office space in the capital

Article posted: 15 Feb 2011

British Land, one of the UK's largest Real Estate Investment Trusts, has today announced its third quarterly results for the three months ending 31 December 2010. It reports continued outperformance driven by good income and capital growth with its Q3 portfolio valuation up 2.3% at £9.3bn.

Continued growth in rental values for office space in Central London has seen the establishing of higher rental levels with lettings agreed at 7.7% ahead of ERV.

British Land reports increased investment activity with development programme and acquisitions totalling £1.9n in the year to date which include the completion of the joint venture with Oxford Properties to develop 610,000 sq ft offices in the City at the Leadenhall Building. Q3 also saw the purchase of Marble Arch House with plans to re-develop the site to provide new offices in Central London.

With good progress being made on its largest committed central London office developments, the REIT confirms that building work is underway at the Leadenhall Building, NEQ and Baker Street. A detailed planning application has been submitted for 700,000 sq ft development at 5 Broadgate (pictured) and consent obtained for a major refurbishment of offices at 199 Bishopsgate.

Commenting on the quarterly results, Chris Grigg, Chief Executive said: "This is a strong financial performance from British Land which reflects the good progress we have made right across the business during what has been a busy quarter. We continued to outperform the IPD benchmark and delivered good growth in income, valuation and NAV. Looking forward, while the UK recovery is likely to be muted, British Land is well placed to benefit from occupier and investor demand for high quality space in retail and central London offices coupled with an increase in acquisition opportunities at more realistic prices."

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Posted by Aree J Rand