British Land unloads retail

British Land sold £419m of retail assets in the last year but will keep the sector a core part of its business despite “uncertainties”, it said in its full-year results. The UK’s second-largest REIT said it was repositioning its portfolio to focus on well-located, high-quality space to respond to changes in the sector. Despite headwinds, British Land’s retail portfolio value was up by 0.3%, which it said reflected a positive ERV growth offsetting yield expansion. Leasing activity totalled 1.2m sq ft and generated £7m in additional rent. In a statement this morning, British Land said it was “mindful of the uncertainties”, adding: “As online retail grows, many operators are evolving their models to focus on the optimal size, shape and nature of their physical store network. “This year, these challenges were compounded by short-term trading headwinds, and several highly leveraged operators with challenged models applied for company voluntary arrangements.” “We believe that physical stores have a key role as a part of a successful omni-channel retail strategy, but that the market is polarising towards the best locations. Size should be appropriate to the catchment and quality of space and services are key.” Overall, the company reported an EPRA NAV of 967p per share – up by 5.7%. Its portfolio valuation was down by 1.6% to £13.7bn, with occupancy slightly down from 98% to 97.4%. It had an active year of disposals, totalling £1.3bn – up from £856m last year – compared with just £206m of acquisitions. Meanwhile, it doubled its committed development pipeline to 1.6m sq ft. To send feedback, e-mail karl.tomusk@egi.co.uk or tweet @ktomusk or @estatesgazette