It would seem the predicted demise of office working may have been over-exaggerated as property development firms bounce back into the black.
Two of the biggest, Land Securities (Landsec) and British Land Company, are back in the black, having surged ahead as the economy reopened.
British Land’s half-year numbers came Landsec also said it was back in profit, and other commercial landlords reported seeing similar trends.
British Land reports it has collected 100 per cent of office rents and saw the busiest period for leasing workplace in a decade, as confidence returned to the commercial property sector. It reported a £370m profit after tax for the period, compared with a loss of £730m a year earlier, according to the Guardian newspaper.
The company’s half-year report showed:
British Land has a large portfolio of properties that includes the Meadowhall shopping centre in Sheffield and campuses in mixed-use areas that have offices, retail, leisure and outdoors spaces.
The huge retail parks are still performing better than shopping centres, which are seeing fewer visitors as many office-based staff are still spending at least part of their week working from home.
Simon Carter, CEO at British Land, said: “We have delivered good financial and operational performance. Strong leasing activity, significantly improved rent collection and increasing values across our Campuses and Retail Parks have driven 6.1 per cent total returns in the half.
“Current market trends reinforce the conviction we have in our strategy, and we are already seeing the benefits of our decision to focus on our unique campus proposition, the value play in retail parks and urban logistics development in London.
“Innovative growth businesses are focused more than ever on the highest quality, most sustainable workspace which we deliver at our Campuses.
“We expect the value opportunity in retail parks to continue with rents stabilising and yields moving in.”
British Land reports that post-COVID-19, more customers are using their physical stores to support an online offer through click & collect, returns and ship from store. Retail parks are ideally suited to this and the space is more affordable, enabling retailers to operate profitably.
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