British Land aims for long term growth

Marion Dakers
BRITISH Land’s growth stuttered in the last quarter, dampened by concerns over the UK economy despite growing demand for office space.

The country’s second-largest property firm said yesterday its net asset value grew by just 2.2 per cent in the three months to 30 June, compared to 15.1 per cent growth in the previous quarter. Pre-tax profit for the first-quarter was £64m, up 3.2 per cent on last year.

The firm remains optimistic about its long-term prospects, after renting nearly a million square feet of office space in the quarter on an average lease length of 12.5 years.

The firm’s next results will also include its recent 700,000 square foot deal to rehouse the London headquarters of UBS. Chief executive Chris Grigg said yesterday the firm plans to demolish 64 Broadgate if planning permission is granted, but the rest of the new headquarters will be based in existing buildings.

Grigg said access to finance remained tight for most property companies, amid global spending constraints, but that a slowdown in yield growth had been expected.

“If you have modern, high-quality buildings in the right locations, you will be the first to benefit from any increase in demand. This has always been at the heart of our strategy,” he told analysts yesterday.

The company saw rental growth of 2.4 per cent in the City, with occupancy up to 97 per cent and average headline rents on the rise. Around half a million square foot of leases are due for review in the coming year.

Grigg also confirmed yesterday the firm was in discussions with potential partners over the Cheesegrater development on Leadenhall. The stock closed three per cent down at 457p .