£300m Meadowhall extension 'unlikely' as co-owner British Land slumps to £1.1bn loss

The real estate firm was hit by a slump in the value of its retail portfolio as it battles the fallout of the coronavirus crisis, according to its annual results.

They also state the Meadowhall extension, which has planning consent but was shelved last year due to uncertainty from Brexit and in the wider economy, was unlikely in the medium-term.

British Land said it had deferred £35 million of rent due to the impact of the virus on tenants but indicated retailers were still struggling and the value of its properties falling.

In a bid to help smaller retail, food and beverage, and leisure customers, British Land said it exempted them from paying rent for three months to June.

The FTSE-100 listed firm, which owns offices in London and several shopping centres, said its loss after tax widened to £1.11 billion for the full year ended March 31, compared to £320 million a year ago.

But it had £1.2 billion of available cash and undrawn facilities and no requirement to refinance until 2024. Leverage remains low, with loan-to-value of 31 per cent at September 30 2019, and it retained ‘significant headroom to our debt covenants’.

To further strengthen its financial position, dividend payments were suspended with immediate effect.

The figures were in its annual results for the year to March 31 2020.

British Land co-owns Meadowhall with the Government Pension Fund of Norway.

BL chief executive, Chris Grigg, said they had faced ‘unprecedented challenges’ from Covid-19.

He added: “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.”

The shift to online retail would accelerate, he predicted, and a drive for a ‘more focused’ retail business would continue. The firm sold £296m of retail assets in the last year.

He added: “Near term, we are expecting the offices market to be more cautious, but we continue to conduct virtual viewings and are encouraged by negotiations we are having.

“In Retail, 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 £1.3bn of undrawn facilities and cash so we are well placed to weather today’s challenges and succeed in the long term.”

In a statement, British Land added: “We announced in late 2018 that we would be rethinking our plans for a new leisure extension at Meadowhall due to the rapidly changing retail environment. We will be launching a public consultation on our revised plans this summer, ahead of a new planning application being submitted, which will propose a phased approach to delivery of our plans.”

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