British Land to Exit Mainland Europe and Focus on London’s West End

on May 15, 2013

Following the release of its full-year results on Tuesday, May 14 (British Land Posts Gain in Pre-Tax Annual Profit), British Land (LON:BLND), the UK’s second-largest real estate investment trust (REIT), announced plans to sell its European retail assets and focus on investing in some of London’s major commercial property markets, including the West End business area.

**British Land to Leave Mainland Europe in £255m Sell-Off**
British Land’s Chief Executive Officer Chris Grigg said on a call with reporters on Tuesday that the property developer is looking to sell its £255 million collection of retail properties in mainland Europe after the assets, which account for 2.4 percent of its £10.5 billion portfolio, fell 17 percent in value in the year to the end of March, hit by rental concessions and widening yields.

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“Looking forward, we consider Europe to be a subscale business for us and our intention is to exit over time,” Grigg said, adding that British Land was not having active discussions with buyers at the moment.
“It could be a long haul, the market’s not that easy in Europe at the moment and we don’t expect any near-term announcement but this is a very clear statement of intent,” the CEO highlighted.

**REIT Set for £500m Spending Spree in London and South-East**
British Land further revealed on Tuesday that it was considering spending £500 million this year to bolster its position in London and the South-East.
“We will look at any good opportunity that comes our way, but you are more likely to see us focusing on London and the South East, as that is where the economic growth is,” Grigg told reporters, adding that he would be disappointed if British Land had not invested £500 million by the end of the financial year.

“Ultimately, rental growth is going to be stronger in the West End and certain fringe areas than in the City itself,” British Land’s CEO stressed. The decision marks a clear indication that the UK’s largest landlords are becoming concerned about the oversupply of office property in the City of London and its impact on rental growth.
!m[REIT’s Share Price Gains Ground After Unveiling of Shift in Focus](/uploads/story/2289/thumbs/pic1_inline.png)

**British Land Share Price Rises**
On Tuesday morning, immediately after the company released its annual financial results, British Land’s share price edged higher in London. The stock retreated later in the day and closed at 620p, slightly below its previous day’s closing level. On Wednesday, however, the stock gained ground, possibly reflecting investors’ optimism regarding the announced plans. As of 15:40 GMT on May 15 the British Land share
price was 1,69 percent up at 630.50p.


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