Offices tend to be quite useful for most businesses. The desks are handy and the chairs serve an important purpose. The doors play their part, as do the windows. But that’s not all, at least for those in the commercial property industry, whose livelihood depends on the development and subsequent sale or leasing of these offices. For them the usefulness of offices is based on their value, the cleverness of their investment and the quality of their build. These include companies such as British Land, whose office portfolio is doing impressively well at the moment.
The UK property investment and development company has unveiled strong first quarter results, bolstered by a firm commercial property commitment to office expansion and acquisition.
Overall portfolio valuation is up to £9.9 billion, a 1.5% rise over the first quarter, extending to 3.4% over six months. The biggest jumps were in offices at 3.7% and retail at 0.4%.
Chief Executive Chris Grigg points to a ‘focus on high quality retail and London offices’ which ‘continues to drive strong valuation and improvement in rental values’. No less than £326 million of commercial property purchases have been made this year, following £1.9 billion of committed investment over the past eighteen months.
Impressively in London, British Land has a presence in five out of six major office developments. The protracted planning process regarding 5 Broadgate has now been resolved and work will soon start on the new headquarters of the UBS investment bank, possibly by the time you are reading this.
Once these projects are completed, London offices will make up 38% of the overall portfolio. This amounts to 7m sq ft of office space, spread across London’s City and West End locations. By 2014, this will be supplemented by a further 2.2m sq ft. Notable future members of London’s commercial property club will be the 610,000 sq ft Leadenhall Building in the City and a 500,000 sq ft mixed-use scheme at Regent’s Place in the West End.
The rest of the portfolio is predominantly in retail. Spread across 27m sq ft of commercial property, it includes 91 retail warehouse properties, 99 superstores, 12 shopping centres and 10 department stores.
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