British Land pins hopes on retail parks as business activity picks up By Reuters

(Reuters) – UK commercial property firm British Land Co Plc (LON:BLND) said on Tuesday it has seen a notable improvement in activity across its businesses after the ease in curbs, adding that the valuation of its outperforming retail parks are expected to rise.

Commercial landlords have underperformed the wider real estate sector as multiple lockdowns and an extended ongoing moratorium on rent collection hurt retail-focused assets, while remote working has weighed on office portfolios.

The FTSE 100-listed firm said its retail parks — specially-built large areas usually in the fringes of large towns and cities — have continued to “clearly outperform,” with footfall and sales at 96% and 99% of pre-pandemic levels, respectively.

Retail parks mainly house “essential retail” such as department stores and grocers that were less impacted by the restrictions, compared with fashion retailers and the hospitality sector.

“On our retail parks, footfall and sales are close to pre-pandemic levels, rents are stabilising with recent deals in line with March ERV (estimated rental value), and there are indications that retail park values are starting to rise as more investors target the market,” CEO Simon Carter said.

The Broadgate Estate owner also said June-quarter rent collection to date was 85%, with 71% collected in the retail segment — 24 percentage points higher than numbers at the same point during the December quarter when strict lockdowns battered the retail space.

Britain is set to lift nearly all remaining restrictions from July 19 in England, as the government believes its vaccination drive — one of the world’s fastest — has largely broken the link between infections and serious illness or death.