British Land PLC says retail rents and collections still under pressure

PLC () said renewals in retail over the past twelve months were running at 20% below the previous passing rent, but the amount of space re-let had increased.

The FTSE 100 property group said it had collected 81% of rents due for the quarter to March 2021, but of that 98% came from office occupiers with retail at 61%.

Even so, it still sees a window to expand in retail parks.

“We see a value opportunity in out of town retail, reflecting increased yields and a more stable occupational market, driven by affordability and stronger demand from retailers who recognise the important role that retail parks can play in supporting an omnichannel strategy,” said the statement. 

Shopping centres in towns will take longer to recover than retail parks, British Land expects, adding they account for 22% of its portfolio.

Following the reopening of non-essential shops in England yesterday, about 1540 stores on its sites are open, representing 79% of the total. 

“We would expect this to increase in the coming weeks if restrictions are relaxed in Scotland as planned and more generally in line with the roadmap set out by the Government.”

The group said it had £1.8bn undrawn facilities and cash available at 31 March 2021.

“We retain significant headroom to our debt covenants and have no requirement to refinance until early 2025,” British Land added.