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 £572m to £275m 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.”