British Land signs first tenant for Cheesegrater as profits increase

Kasmira Jefford
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PROPERTY developer British Land has formally signed a pre-let agreement with insurance broker Aon to lease a third of its Leadenhall building, nicknamed the Cheesegrater, in the City.

Aon will take 191,000 square feet over 10 floors of the 47-floor skyscraper – due to be completed mid-2014 – paying on average £56.60 per square foot for 19 years.

The signing, which has been expected since May, came as British Land posted a rise in first-half net asset value (NAV) to 591p a share, from 567p in March, while its underlying pre-tax profit rose 3.9 per cent at £132m.

The blue-chip developer’s total portfolio value was up 2.2 per cent at the half-year mark to £10.2bn, boosted by a 5.3 per cent increase in the value of its office space, while its retail estate rose 0.7 per cent.

Chief executive Chris Grigg said: “Against the background of slowing economic growth and renewed concern about the Eurozone, our results demonstrate that British Land is highly defensive and well positioned in the near term.”

Despite worries around the sector, Grigg pointed out that level of occupancy across the company’s retail and office portfolio remains above 98 per cent.

He stressed that demand for prime office space remained resilient, adding that office development across London would be lower than previously thought, with a shortage of new space between 2013 and 2015 when many leases come up for renewal.

“We’re under no pressure to pre-let now. There’s a shortage of grade A space. The City has proved to be remarkably resilient over the course of the past decade,” he said.

But analysts criticised the lack of dividend growth, which remained flat at 6.5p for the second quarter.

Shares fell 1.2 per cent, closing at 497.4p last night.