Losses at shopping centre and retail park owner British Land have been stemmed in its first quarter, helped by a robust performance by its retail assets.

Losses shrunk from ÂŁ572m to ÂŁ275m in the three months to June 2009, despite the continued decline in capital values and deflation in rents.

British Land said retail like-for-like rental income grew 3.5% in the three months to June 2009, driven by retail warehouses. Occupancy levels in retail stand at 97.6%. Retailers account for 60% of British Land’s rent roll.

Retail warehouses reduced in value by 3.5% within the UK and 5.1% including Europe. Rental values in the retail warehouse portfolio fell 2.5% overall, although on some parks they fell 15.4%.

Superstores, which comprise 13.1% of the portfolio, experienced a small increase in value and rents.

UK shopping centres declined in value by 4.5% and by 6% including Europe, and rental values fell 3.4%. British Land’s European out of town portfolio, which comprises 3% of the overall estate, suffered a 20% slump in value as values on the continent caught up with the UK.

The landlord said that occupiers in administration at the end of June represented “only 1% of rent, down from 1.8% in March 2009”. However, it said by the end of July this figure had risen to 1.2% as a result of Allied Carpets’ administration last month. It also said DIY chain Focus, which announced a CVA last month, affected the figure.

However it insisted: “Of the 17 Allied Carpets and Focus stores on our estate, 14 are either being retained or already under offer to re-let.”

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