UK retail space in strong demand

British Land, the UK property company, has reported that for all the doom and gloom, there is still a strong demand for retail space in the UK. Occupancy at British Land’s sites in the UK, including Meadowhall shopping centre in Sheffield and the

recently acquired Drake Circus in Plymouth, stood at 98.5 per cent during the year to March 31st 2011, while rental values were 0.7 per cent ahead for the full year.

Figures, however, are relative to different parts of the country. While consumer spending held up better in the south-east, the strength of demand was more a reflection of the attractions of individual assets - accessibility, affordability, unit configuration and overall environment - than their regional location,” the group said.

“We saw stronger retailers start to expand their footprint in the best locations but at the same time more aggressively looking to reduce their exposure to their smaller and more poorly performing stores.”

British Land’s retail portfolio performed well, with retail assets rising 5.3 per cent in value to reach £6.3 billion and capital returns up 5.6 per cent. CEO of the business Chris Grigg argued that British Land is showing “real momentum” at present and described the company’s retail portfolio as “high quality”.

“Our strong letting performance across our portfolio shows clearly that there is still demand from occupiers for the well-located prime retail and London office assets we provide and we expect this to continue,” he explained.

“With our strong asset base, management expertise and financial strength we are well placed to continue our strong performance.”