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British Land sees values slump

19/11/2008

RETAIL, office and business park developer British Land said today the value of its property portfolio had plunged more than 10 per cent.

In the six months to September 30, the company said its valuation had dropped 10.8 per cent, with office buildings 13.2 per cent lower and high street retail assets 12.7 per cent down over the period.

British Land owns the Meadowhall shopping centre in Sheffield and the Bon Accord, Aberdeen, as well as city centre offices and industrial complexes across the country.

The company posted a pre-tax loss of £1.33bn, including valuation write-downs, but a £144m pre-tax profit when these were stripped away.

Chairman Chris Gibson-Smith said the company operated well `against a backdrop of heightened stress in the markets'.

"While values have been marked down, reflecting further softening in prime yields, our high occupancy levels and long leases, plus a diversity of tenants and industries, ensure cash flow security," he said.

Meadowhall, one of the UK's largest shopping centres, saw its value drop 7.4 per cent to £1.4bn.

British Land also saw falls in valuation across the board, with City offices, representing 28.8 per cent of the total portfolio, dropping 14.1 per cent.

Mr Gibson-Smith said retailers had reported difficult trading and this would affect prospects for rental growth in the short term. However, British Land had not seen `significant defaults', he added.

"Sales of properties completed in the 12 months prior to the credit crunch reached £2.5bn gross, and since then over £2bn," he said - "the former catching the height of the market, the latter still at yields which look advantageous today."