UK firm taking advantage of thriving London office sector
Rental growth of up to 20% on prime central London offices is driving investment at developer British Land, according to its head of offices, Tim Roberts.
This week British Land revealed details of its development plans in London. These include the refurbishment of 199 Bishopsgate, which will be complete “towards the end of 2012” and the potential to refurbish and add extra floors to 39 Victoria Street.
This is in addition to the £340m headquarters building for investment bank UBS, which won planning in December, and the £340m Richard Rogers-designed Cheesegrater, which is on site,It also said demolition and ground works are expected to start later this year for the £59m redevelopment of Marble Arch House, which it bought last month.
Announcing its results for the third quarter of its 2011 financial year, which ends 31 March, it said it made £119m pre-tax profit, up 6% on 2009, with the net value of its assets having increased 11% from March, to £4.9bn. The gross value of its property portfolio increased 2.3% in the quarter, to £9.3bn, up 13% on a year ago.
Although the London market is thriving, the office sector across the rest of the country is not doing so well, struggling to attract rental growth and financing, according to Roberts.
“We are seeing up to 20% rental growth on prime London sites but there’s little or no growth outside London as far as we can see. Financing is still hard to come by too, even in London,” he said.
Nonetheless, the London office market is not the only area in which British Land is active. This week’s update said plans are “well under way” to create a new 45,000ft2 leisure centre at the Glasgow Fort shopping park, with negotiations almost concluded with a major cinema operator. It said it was also close to signing up a number of restaurant brands for the development.