The British Land Company

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.

Essential information
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.