British Land, one of the leading real estate companies in the UK, has revealed that it has sold properties worth £456 million since the onset of the Covid-19 pandemic. The company, which owns popular properties like Meadowhall and Drake Circus, made this announcement while releasing its first-half results. Like many other landlords, British Land has had to rethink its strategy due to the ongoing retail crisis and its impact on its portfolio.

During the first six months of this year, British Land’s overall portfolio value dropped from £11.2 billion to £10.3 billion, with the value of its retail properties witnessing a decline of 15% to £3.2 billion. Lockdown measures and the struggles faced by retailers, many of whom have opted for company voluntary arrangements, have had a significant impact on the company’s performance.

An interesting contrast has emerged between the tenants of British Land’s offices and its retailers. While the office tenants managed to pay 97% of the rent owed (£48 million), the retail tenants only paid 62% (£64 million) of the rent owed. This discrepancy emphasizes the challenges faced by the retail sector. As a result, British Land has redirected its focus towards its office properties for growth and will continue to offload its retail assets as part of its revised strategy.

Aside from selling properties, British Land plans to repurpose those retail properties that it is unable to sell. There is some good news, as a major portion of the company’s portfolio comprises retail parks, which have fared comparatively better than other segments of the UK retail sector. This presents an opportunity for British Land to convert some properties into e-commerce warehouse spaces to meet the rising demand for online shopping.

The company reported a pre-tax loss of £757 million for the first half of this financial year, in comparison to a loss of £444 million during the same period last year. Revenues also declined from £328 million to £255 million. Nevertheless, incoming CEO Simon Carter remains positive and emphasizes the company’s commitment to ensuring that its key properties are occupied by successful retailers.

Overall, British Land’s decision to sell retail properties and shift its focus to office properties reflects the changing landscape of the UK retail sector. Despite significant challenges, the company is adapting its strategy to navigate the current crisis and capitalize on growth opportunities in the real estate market.

Source:
1. ‘British Land Sells £456m Worth of Retail Properties, Plans to Sell More During Pandemic’ – [link](https://www.propertyweek.com/news/british-land-sells-456m-worth-of-retail-properties-plans-to-sell-more-during-pandemic/5111677.article)
2. ‘British Land to repurpose unsellable retail properties’ – [link]()