UK REIT British Land has written down the value of its retail portfolio by more than 25% due to the impact of the coronavirus.
The company, which focuses on London offices and retail properties in the UK, saw its total portfolio shed over 10% of value, leading to a £1.1 bn loss for the year ended 31 March (compared to a loss of £320 mln a year earlier). Retail assets were down 26.1%, while office properties gained 2.3%. In total, the company’s portfolio is now valued at £11.1 bn, versus £12.3 bn a year earlier.
‘Like businesses around the world, in recent months our focus has been on responding to the unprecedented challenges brought about by Covid-19,’ CEO Chris Grigg said. ‘This was already a difficult year for retailers, many of whom have been severely impacted by the lockdown and the early effects of the crisis were reflected in the value of our retail portfolio.’
He added: ‘Given current valuations and the lack of liquidity in the investment market, our focus is on delivering value though asset management, working to keep our places full and exploiting demand for assets which support an online offer. Our financial position is robust with debt low, significant covenant headroom and access to £1.3 bn of undrawn facilities and cash so we are well placed to weather today’s challenges and succeed in the long term.’
The company said it had lost £2 mln in rent by giving a three-month payment holiday to the end of June to smaller retail, food and beverage, and leisure customers. In addition, about £35 mln of rent payments have been deferred for customers facing financial challenges due to the spread of Covid-19. British Land said it collected 68% of rent owed in March, 97% from its London office sites, but just 43% from retail customers.
The company has suspended dividend payments for the time being.
