The procurement route used by British Land varies depending on the project and what is most appropriate at the time.
Current methods are two-stage tendering with a guaranteed maximum price, construction management and design-and-build. Recently, two major projects have been let under a construction management form of procurement.
Current and future projects
Over the year to March 2002, British Land completed more than 120,000 m2 of development resulting in a sharp rise in its capital expenditure. The completed developments had an estimated rental value of £25m, a total construction cost of £188m and 90% of the space was either let or under offer. British Land's share of the construction cost was £155m. In March 2002, the company's development programme, including joint ventures, was worth £1.6bn and comprised 26 projects. Of this, 147,700 m2 was committed, and 60% was pre-let. The next stage totals 630,000 m2 and will be developed on a basis of pre-lets and favourable market conditions.
Notable projects committed to development at the start of 2002 included: Plantation Place (50,000 m2 of offices); Centre West (26,600 m2 of retail); and Thatcham (33,100 m2 of warehouse space). The estimated construction cost of the committed development programme is £424m, of which British Land's share is £336m. In March 2002 the cost to complete the work was £366m. The following development programme, which totals about £1.15bn, includes about 622,000 m2 of space. Projects include: 61,400 m2 of office space in the City; 56,700 m2 of office space in Blythe Valley and 79,000 m2 of office space in Coventry. British Land also owns supermarkets and retail warehouses, and is continually adding to this portfolio.
In its latest interim statement, British Land announced a marginal rise in the value of its portfolio alongside a rise in rental income and the sale of £350m of properties. The group's office portfolio fell by 2.7% in value over the six months to September 2002, but its retail portfolio increased by 3.1%. Group capital expenditure amounted to £146m including joint ventures.
The total cost of the programme at the end of 2002 was close to £900m, with almost £270m of this relating to committed projects. Reflecting current market conditions, just 50% of committed projects were pre-let by the end of September 2002, compared with 60% earlier in the year. With a large presence in the London office market, British Land is adopting a cautious attitude to planned developments, with prelets seen as the way forward.
Development director Mark Wright Contact details
10 Cornwall Terrace, Regent’s Park,
London NW1 4QP
phone: 020-7486 4466
fax: 020-7935 5552
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The British Land Company