Meadowhall co-owner British Land loses £2bn in value due to pandemic
Meadowhall co-owner British Land has seen more than £2 billion wiped off the value of shopping centres and offices as the pandemic wreaked havoc on its estate.
The group, which owns the mega-mall in Attercliffe and offices in London, reported a 10.8 per cent tumble in the value of its property portfolio, from £11.2 billion to £9.1 million at the end of March.
It posted its third straight year of losses, with pre-tax losses of £1.05 billion for the year to March 31 against losses of £1.1 billion the previous year.
The group was able to collect just 71 per cent of rent across its retail estate, with many shops closed for most of the year due to coronavirus restrictions. By contrast, it collected 99 per cent of office rents.
The bad news comes after Meadowhall director Darren Pearce revealed they were left in a ‘very precarious position’ by retailers refusing to pay rent.
Giving evidence to the Housing, Communities and Local Government Committee, he said some very successful shops that remained open ‘held back on paying anything’ at times during the pandemic.
He added: “It was incredibly difficult throughout that period and left us in a very precarious position at times. Companies that could pay did not pay and that’s not right.”
Meadowhall had offered ‘huge’ rent concessions and deferments and cut the service charge by 20 per cent to help occupiers, he said.
On an underlying basis, profits at British Land reduced by more than a third, down 34.3 per cent at £306 million as many of its office block and retail tenants were left unable to pay rent for most of the year.
Its retail sites took the brunt of the hit from the pandemic, with values plunging by 24.7 per cent, while it suffered a 3.8 per cent fall across offices.
British Land said it had seen an “encouraging” performance across its estate since non-essential retail reopened on April 12, with shopper numbers and sales recovering to pre-pandemic levels.
However, it cautioned retail markets are set to “remain tough and we expect rents to decline further”.
It added: “We are seeing signs of stabilisation on retail parks and our central case is an additional rental decline of around 5 per cent… shopping centres, which have been more impacted by Covid-19, are likely to take a little longer to stabilise.”