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British Land grapples with Brexit downturn as it hunts 1.4m sq ft of leasing deals

UK developer British Land has revealed it is currently in discussions for ten ‘major’ leasing deals across its three London campuses as it looks to battle Brexit headwinds.

In its third quarter trading update, which was released this morning, the property firm said that discussions were ongoing with ten potential occupiers for its Broadgate, Paddington and Regent’s Place schemes which could total 1.4m sq ft.

With its exposure to the City office market, the softening of demand as a result of the EU Referendum could hit British Land harder than other developers in the capital, and its market value has plummeted around 20% since last June’s vote.

According to its trading update, the firm saw 314,000 sq ft of retail lettings and renewals, which it said was 8.7% above ERV, while a further 189,000 sq ft are under offer.

In light of its ongoing Brexit maneuvering, the firm also saw £119m of disposals, which included £85m of non-core retail and office disposals which it said were 2% ahead of September 2016 valuations.

Even more significant moves could be on the cards this year as British Land is rumoured to looking to offload its £500m stake in the Cheesegrater building too.

Chris Grigg, Chief Executive, said that British Land remains mindful about the current market climate, but that it had still been a ‘positive’ quarter for the firm.

He commented: “British Land has had a positive quarter reflecting the strong positioning of our portfolio and our engagement with occupiers and consumers. We have completed over 400,000 sq ft of lettings across the business and are progressing discussions with a broad range of occupiers.

“Retail footfall and sales growth continue to outperform industry benchmarks and we have made further disposals of non-core assets and residential units ahead of valuation. The business is well placed; we remain mindful of potential headwinds going forward.”

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