British Land swings to loss as retail turmoil weighs on portfolio

British Land swung to a loss in the year to March as turmoil in the retail sector dragged down the value of one of the UK’s largest listed property portfolios. 

The FTSE 100 group on Wednesday reported a loss of £319m for the year, down from a £501m profit a year earlier. 

A 4.8 per cent drop in the value of British Land’s properties to £12.3bn was led by an 11.1 per cent decline in the value of its retail assets, which include Sheffield’s Meadowhall centre. 

Underlying profit, which strips out the effects of property price movements, was down 10.5 per cent to £340m. 

Chris Grigg, chief executive, said retail was “likely to remain challenging as structural change continues but there are early signs on parts of our portfolio, that some of the short-term operational headwinds impacting retailers are easing”. 

The company said like-for-like rental growth across its portfolio, at £15m, had outstripped the £14m impact of retailer insolvencies. 

The company wants to reduce its retail exposure to one third of its portfolio, having already cut it to less than half from two-thirds in 2010. It sold off £1.5bn of properties during the financial year.

Mr Grigg added that the London office market was “healthy”. “We expect the London market to remain active, as occupier demand for the highest quality space continues to be firm and supply is relatively constrained,” he said. 

“We are mindful of the ongoing Brexit uncertainty, but our business is well positioned and financially strong.” 

The company increased its full-year dividend by 3 per cent to 31p. It said it would extend its share buyback programme by £125m, having bought back £500m over the past two years.

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