British Land provided investors with a cheery update on the outlook for the commercial property sector, as the firm was boosted by leasing activity across London and strength of retail parks.
In an update ahead of its AGM later today, the property developer secured 552,000 sq ft of leasing across its portfolio in the first quarter, 11 per cent ahead of its estimated rental value (ERV).
The firm was particularly bolstered by activity across its business campuses where occupancy remains high at 96 per cent and 164,000 sq ft of leasing was completed.
The London-listed property firm also secured its first pre-let at The Priestley Centre, Guildford, which it acquired for £12m in 2021, in addition to the sale of a mixed used building in Marylebone Road, London.
Global life sciences tools company LGC, took a 48,000 sq ft of lab and office space, making it one of the “largest life sciences deals in the UK this year,” bringing the building to 58 per cent pre-let, ahead of its completion in the fourth quarter of the year.
Its retail offering, which includes retail parks, was also bolstered by 387,000 sq ft of leasing activity.
This included 227,000 sq ft of deals, which were 13.5 per cent ahead of ERV, with a further 738,000 sq ft under offer.
Chief of British Land, Simon Carter, said retail parks continue to be the winning retail format “given their affordability, omni-channel compatibility and low capex requirements”.
The format tends to be cheaper as retail parks are located on the outskirts of larger towns, meaning they benefit from cheaper rents compared to highstreets.
The group acquired the property from Belgium real estate firm Wereldhave in 2013.
“We continue to see strong operational momentum in the business, despite ongoing macroeconomic uncertainty, with good leasing activity reflecting our focus on execution and the exceptional quality of our portfolio,” Carter said.
“We have also made strategic progress in life sciences and innovation, with one of the largest lab lettings in the market and the launch of modular lab space at Canada Water.”