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British Land falls to £1.1bn loss as coronavirus pandemic hits rent payments

City AM logo City AM 27/05/2020 James Booth
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British Land today said its full year results were hit by a slowdown in rent payments in March due to coronavirus and a subsequent fall in the value of its office and retail portfolio.

The retail giant posted a loss of £1.1bn in the year to 31 March, with underlying profit for the year falling 10 per cent to £306m.

Revenue fell from £904m to £613m in the latest financial year.

The real estate giant said it had felt the effects of the coronavirus crisis in March, with both retail and office clients seeking to delay rents.

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More on coronavirus:

Download the Microsoft News app for full coverage of the crisis

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British Land said it had collected 68 per cent of March rent, 97 per cent of what it was owed by offices and 43 per cent of what it was owed by retail tenants.

The company said it had deferred around £35m of rent to customers suffering financial hardship because of the crisis.

It also said it had released smaller retail, food and beverage and leisure customers from rental obligations which would lead to a loss of £2m.

British Land said it had £1.3bn undrawn facilities and cash with no requirement to refinance until 2024.

The company said it could withstand a further fall in the valuation of its portfolio of of 45 per cent before its lending arrangements would be affected.

British Land said the crisis had so far knocked off ten per cent of the value of its holdings which have shrunk to £11.1bn.

Chris Grigg, chief executive, said: “Like businesses around the world, in recent months our focus has been on responding to the unprecedented challenges brought about by covid-19.

“We have acted quickly and effectively to support our customers, partners and local communities and to protect the long term value of our business.”

Industries facing the toughest comeback after coronavirus (Lovemoney)

Russ Mould, investment director at AJ Bell, said: “The largely unspoken fear in today’s results from property investor British Land is that the coronavirus impact on its retail assets could be mirrored in its office block holdings.

“Given nearly all non-essential shops, food and drink and leisure outlets remain closed, the collapse in value of this part of the portfolio is entirely unsurprising, as are difficulties in getting rent from tenants in these sectors.

“At the moment the company has robust enough financial foundations to withstand a further significant collapse in the valuation of its assets. For now the value of its offices are holding up and most of its tenants are paying rent on time.

“However, this may change as recession begins to have a more widespread impact. In the longer term demand for offices may be affected as working from home habits built up over the pandemic prove hard to break.”

British Land’s share price rose seven per cent this morning to 407p.

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Stay at home as much as possible to stop coronavirus spreading - here is the latest government guidance. If you think you have the virus, don't go to the GP or hospital, stay indoors and get advice online. Only call NHS 111 if you cannot cope with your symptoms at home; your condition gets worse; or your symptoms do not get better after seven days. In parts of  Wales where 111 isn't available, call NHS Direct on 0845 46 47. In  Scotland, anyone with symptoms is advised to self-isolate for seven days. In  Northern Ireland, call your GP.


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