November 16, 2017 / 7:48 AM / a year ago

British Land sees healthy demand for UK office space

(Reuters) - Property developer British Land (BLND.L) reported a 2.6 percent rise in net asset value in its first half, adding to signs of still healthy demand for UK office space even though companies in London remain cautious ahead of Brexit.

Britain’s second-largest publicly listed property developer said on Thursday that it leased 1.3 million square feet of office space in Britain in April to September, well above 769,000 square feet in the same period last year.

“Although the wider operating environment is uncertain, we are generating healthy leasing interest at good pricing across our portfolio, and prime capital values remain firm,” it said.

British Land said its continuing focus on three major London campuses - Broadgate, Regent’s Place and Paddington Central - had underpinned strong occupier demand during the period.

Still, the company said occupiers in the wider London office market were cautious about their requirements as a result of political and economic uncertainty.

It said it maintained the amount of space it was developing, before securing tenants, at 4 percent, after cutting it to that level previously because its London office customers were taking longer to make decisions on moves.

EPRA net asset value, a key industry metric that reflects the value of a firm’s buildings, rose to 939 pence per share from 915 pence per share in the six months ended Sept. 30.

The company, which also owns the Meadowhall shopping centre in Sheffield, said underlying profit fell marginally to 198 million pounds from 199 million pounds, in the same period last year.

The developer, which also increased its half-year dividend by 3 percent to 15.04 pence per share, said separately it would redevelop 1 Triton Square, situated in Regent’s Place, and finalised terms on a pre-let of the office space with Dentsu Aegis Network for 20 years.

The company committed 196 million pounds to the redevelopment and work is expected to start in March 2018.

Reporting by Radhika Rukmangadhan in Bengaluru; Editing by Mark Potter and Susan Fenton

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