British Land upgrades guidance on retail park assets
British Land upgraded its guidance for its retail park assets on Tuesday, which it said had gained favour among a broad spectrum of customers, primarily for their affordability, convenience, and adaptability with omnichannel retailing.
The FTSE 250 company currently holds an 8% share of the retail park market.
It said factors such as stringent planning regulations, smaller lot sizes, and market values being under replacement costs had restricted the supply of new retail parks, which, combined with their inherent benefits to consumers, made them a compelling and fluid investment option in the direct market.
British Land said it had been experiencing robust demand for its retail parks, with the unique combination of that demand, limited supply, and its strategic scale and focus on operational execution had sustained an impressive occupancy rate of 99%.
There was also notable leasing momentum, with 511,000 square feet leased in the five months ended 30 August, marking a 15.3% increment above the estimated rental value.
An additional 677,000 square feet were currently under offer at a promising 19.4% above ERV.
Frasers Group had agreed on expansion, with Sports Direct increasing its footprint to 21,000 square feet and 24,000 square feet at Teesside Park and Wheatley Retail Park, Doncaster, respectively.
A new lease for a 13,000-square-foot Flannels store was also inked at Teesside Park.
Meanwhile, a lease agreement for a 23,000 square foot space had been agreed with fast fashion major Primark at Glasgow Fort, while a considerable 43,000 square foot lease was struck with value retail giant B&M at Teesside Park.
Owing to those positive developments and leasing rates substantially above the ERV, British Land revised its growth forecast for retail park ERVs for the 2024 financial year, increasing it from 2% to 4% to between 3% and 5%.
At 0918 BST, shares in British Land Company were up 1.91% at 314.1p.
Reporting by Josh White for Sharecast.com.