TIDMBLND
RNS Number : 1475L
British Land Co PLC
11 January 2021
British Land Operational Update
11 January 2021
Following the Christmas trading period and latest quarter date
for rental payments on 25 December, British Land is providing the
following business update.
Retail operational update
Since our half year update in November, retailers have been
required to operate under a series of different restrictions. This
included a national lockdown in November (closing non-essential
retail but allowing click and collect), regional restrictions based
on Tier 1-4 designation in December, and in January, a third
national lockdown.
We continue to help our customers trade safely and securely
wherever possible. Our assets are particularly well suited to click
and collect which has enabled many non-essential stores to continue
to operate throughout this important trading period. On 24 December
73% of our stores were operational and footfall and sales proved
resilient in the four weeks to Christmas.
From 30 November until 26 December, footfall across our
portfolio was 76% of the level achieved last year, 21ppt ahead of
the UK market benchmark (ShopperTrak National Index). There was a
small difference in performance between assets in different Tiers
with those in Tier 4, 5ppt weaker on average than the other Tiers
due to the closure of non-essential stores. Like-for-like retailer
sales for stores that were open were 81% of the same period last
year and there was no notable difference in performance between
assets in different Tiers.
Well located, open air retail parks have continued to play an
important role for retailers and demonstrate operational
outperformance with footfall 87% of the same period last year,
32ppt ahead of the UK market benchmark. Retailer sales for stores
that were open on our retail parks were 85% of the same period last
year.
As at 7 January, following the latest national lockdown, 620 of
our stores are able to trade in some way, representing 32% of the
total.
Rent collection update
Across the business, GBP86m of rent was due for payment in the
December quarter before taking account of adjustments made in
support of our customers as a result of Covid-19. This comprised
GBP42m in Retail and GBP44m in Offices. As of 7 January, we had
collected 71% of the total amount.
In Offices, we have continued to demonstrate excellent rent
collection. We have now received 99% of September rent, 99% of June
rent and 98% of March rent (see Tables A, B and C in the appendix).
As at 7 January, we have collected 95% of December rent and would
expect that to improve in line with previous quarters.
In Retail, rent collection levels for previous quarters have
continued to increase, we have now collected 72% of September rent,
73% of June rent and 49% of March rent, with March collection being
lower due to 27% of deferrals provided (see appendix). As at 7
January 2021, 7 working days after the quarter end we have
collected 46% of December rents, broadly in line with the
collection rates at the same point in the previous quarter, and
would again expect collection rates to improve over the coming
weeks.
Rent due between 25 Offices Retail(1) Total
December and 7 January
-------- ----------
Received 95% 46% 71%
Rent deferrals - - -
Rent forgiven - - -
Customer paid monthly 1% 9% 5%
Outstanding 4% 45% 24%
------------------------- -------- ---------- -------
Total(3) 100% 100% 100%
-------------------------
GBP44m GBP42m GBP86m
------------------------- -------- ---------- -------
Collection of adjusted
billing(2) 96% 50% 74%
------------------------- -------- ---------- -------
(1) Includes non-office customers located within our London
campuses.
(2) Total billed rents exclusive of rent deferrals, rent
forgiven and tenants paying monthly.
(3) The amount billed is less than what was billed in previous
quarters due to the exclusion of Scottish quarter date amounts
which are due to be billed on 28 February and monthly amounts due
for February and March which will be billed later in the quarter.
Total billings for the quarter will be less than that of previous
periods due to the various asset disposals made since 30 September
2020.
We continue to engage with those customers who have strong
businesses, but have been disproportionately impacted by Covid-19,
to help them manage their rental obligations. We are agreeing
solutions which are both equitable and mutually beneficial,
generally involving moves to monthly rents, deferrals and partial
settlement of outstanding rents for the period of closure in return
for lease extensions, reduced incentives, commitments to additional
space and the removal of lease breaks.
Active capital recycling
In November we announced four key priorities for our business
including active capital recycling and have continued to make good
progress. We sold our Clarges offices development in November for
GBP177m and on 23 December we were pleased to announce the sale of
a 75% interest in three West End offices for GBP401m to Allianz
Real Estate which will become our joint venture partner. The
transaction represented a blended net initial yield of 4.32% and a
premium to September book value. Following the transaction, British
Land will continue to manage all three buildings and will receive
an asset management fee in line with our similar joint venture
arrangements.
Since this transaction was announced, we have completed on a
further GBP19m of smaller retail sales, bringing total assets sold
in FY21 to GBP1.1bn with GBP660m in the second half. This activity
demonstrates good progress against our commitment to recycle
capital into accretive developments, including Norton Folgate which
we committed to in November and Canada Water, where we have
planning permission for our 53 acre site and enabling works have
commenced.
Appendices
Table A - Rent collection, March quarter 2020(1)
Rent due between 25 Offices Retail(2) Total
March and 23 June
-------- ----------
Received 98% 49% 70%
Rent deferrals 1% 27% 16%
Rent forgiven 1% 12% 7%
Outstanding - 12% 7%
------------------------ -------- ---------- --------
Total 100% 100% 100%
------------------------
GBP58m GBP78m GBP136m
------------------------ -------- ---------- --------
Collection of adjusted
billing(3) 100% 81% 91%
------------------------ -------- ---------- --------
Table B - Rent collection, June quarter 2020(1)
Rent due between 24 Offices Retail(2) Total
June and 28 September
-------- ----------
Received 99% 73% 84%
Rent deferrals - 4% 2%
Rent forgiven - 6% 4%
Outstanding 1% 17% 10%
------------------------ -------- ---------- --------
Total 100% 100% 100%
------------------------
GBP57m GBP80m GBP137m
------------------------ -------- ---------- --------
Collection of adjusted
billing(3) 99% 81% 89%
------------------------ -------- ---------- --------
Table C - Rent collection, September quarter 2020(1)
Rent due between 29 Offices Retail(2) Total
September and 24 December
-------- ----------
Received 99% 72% 82%
Rent deferrals - - -
Rent forgiven - 1% 1%
Outstanding 1% 27% 17%
---------------------------- -------- ---------- --------
Total 100% 100% 100%
----------------------------
GBP53m GBP81m GBP134m
---------------------------- -------- ---------- --------
Collection of adjusted
billing(3) 99% 73% 83%
---------------------------- -------- ---------- --------
(1) As at 7 January.
(2) Includes non-office customers located within our London
campuses.
(3) Total billed rents exclusive of rent deferrals and rent
forgiven.
Enquiries:
Investors & Analysts:
David Walker 07753 928382
Joanna Waddingham 07714 901166
Media: Charlotte Whitley 07887 802535
Notes to Editors
About British Land
Our portfolio of high quality UK commercial property is focused
on London Offices and Retail around the UK. We own or manage a
portfolio valued at GBP13.7bn (British Land share: GBP10.3bn) as at
30 September 2020 making us one of Europe's largest listed real
estate investment companies.
Our strategy is to provide places which meet the needs of our
customers and respond to changing lifestyles - Places People
Prefer. We do this by creating great environments both inside and
outside our buildings and use our scale and placemaking skills to
enhance and enliven them. This expands their appeal to a broader
range of occupiers, creating enduring demand and driving
sustainable, long term performance.
Our Offices portfolio comprises three office-led campuses in
central London as well as high quality standalone buildings and
accounts for 65% of our portfolio. Our Retail portfolio is focused
on retail parks and shopping centres, and accounts for 31% of our
portfolio. Increasingly our focus is on providing a mix of uses and
this is most evident at Canada Water, our 53 acre redevelopment
opportunity where we have plans to create a new neighbourhood for
London.
Sustainability is embedded throughout our business. Our places,
which are designed to meet high sustainability standards, become
part of local communities, provide opportunities for skills
development and employment and promote wellbeing. In April 2016
British Land received the Queen's Award for Enterprise: Sustainable
Development, the UK's highest accolade for business success for
economic, social and environmental achievements over a period of
five years.
Further details can be found on the British Land website at
www.britishland.com
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