(Reuters) - Real estate firm British Land Co reported a 6.4% drop in annual net asset value (NAV) on Wednesday, as retailers invested less in physical stores amid increased online competition.
Britain’s second-largest listed property developer said EPRA net asset value, a key industry metric that reflects the value of a firm’s buildings, was 905 pence per share in the year ended March 31, down from 967 pence a year earlier.
The company said its retail valuations were down 11.1 percent, as many retail firms were shutting down stores to cut costs and focus on the online space, dealing a blow to real estate firms that get a large chunk of their business from retailers.
Rivals echoed similar concerns and blamed a string of collapses on Britain’s high street that led to higher vacancies and declining asset value.
Land Securities Group Plc on Tuesday said full-year NAV fell 4.5%, while shopping centre operator Intu Properties lowered its full-year rental income forecast earlier this month.
British Land, which counts Marks and Spencer, Tesco and IKEA as tenants, said London market would remain active but there was however a “notable pause” in the early part of 2019 as Brexit uncertainty increased.
The company also said its London office business portfolio value rose 1.1%.
Reporting by Justin George Varghese in Bengaluru; editing by Gopakumar Warrier