British Land Co Plc, the UK’s second-largest listed property developer, posted a rise in its asset value as demand for commercial property stayed strong in the run-up to the European Union referendum vote.
The looming threat of Britain potentially breaking away from the EU had done little to reduce occupier demand, especially in retail, British Land Chief Executive Chris Grigg said.
“On the retail side of our business, we’ve seen frankly little change, and in offices, a bit of a slowdown, but again a lot of discussion in terms of potential pre-letting,” Gr igg told reporters on a call.
Occupancy across British Land’s portfolio, which includes its flagship “Cheesegrater” skyscraper, rose 70 basis points to 99 percent in the year ended March 31, the company said.
EPRA net asset value, which is calculated according to European Public Real Estate Association guidelines, rose 10.9 percent to 919 pence per share.
The rise in NAV, which reflects the value of a property company’s buildings, however, received mixed reactions from the market, with at least two analysts saying they were expecting a higher NAV than reported.
British Land shares fell 1.6 percent to 708.75 pence by 0931 GMT, underperforming the FTSE 100, which fell 0.3 percent. The stock was among the top percentage losers on the bluechip index.
The company said it remained confident for the year, despite the potentially adverse impact on the domestic property market if the UK chose to leave the European Union.
Despite strong occupier markets, deal transaction levels had slowed this year, partly as investors grew concerned about the implications of the referendum vote on June 23, Grigg said.
The company, which has 20 billion pounds worth of assets under management, urged the UK to stay with the bloc.
British Land said it continued its investments and its committed speculative development pipeline currently stood at 530 million pounds ($761 million), with the option to take on more projects over the next six to 18 months.
Developers tie up huge amounts of resources in speculative projects that often take a few years to be ready to occupy and such plans are seen as a show of confidence in the growth prospects of the market.
“(Development decisions) are not really predicated on Brexit per say, so we’re not actually holding off. But we have a lot of optionality and that suits us in this situation,” Grigg said.