British Land records £42m net loss as retail market ‘remains challenging’

British Land has reported a net loss of £42m in the first half of the year, attributed to the “challenging” retail market and has said it aims to reduce its retail portfolio over the next five years.

British Land said that it aims to cut its holdings in retail property, which currently sits at around half of its portfolio, down to between 35-30%. Chief executive Chris Gregg said that the transition would be made over five years with that ecompany instead choosing to focus on housing and office spaces.

The company, which owns the Meadowhall shopping centre in Sheffield, has already made progress with the strategy as it announced it had sold £634m worth of its retail property in the past year.

The news comes as the net loss which was down from a £238m profit the previous year . The company’s overall net value also dropped by 1.9% to £12.8bn with underlying profit dropping 14.6% £169m.

Grigg said: “In a particularly challenging retail market, we remained focused on delivering operationally day-to-day while at the same time progressing our strategy and refining our portfolio. With £634m of retail assets sold or under offer in the last 12 months, we have sold a total of £2.8bn since April 2014.

“We remain thoughtful in our capital allocation, extending our share buyback after selling 5 Broadgate at book value. At the same time, we again reduced leverage so we are well placed to further progress the strategic initiatives we set out in May to build an increasingly mixed use business.”

He added: “We expect retail to remain challenging in both the occupier and investment markets as the impact of long-term structural change is compounded by short-term headwinds. Against this backdrop, our strategy is clear, consistent and focused on the long term. We have created attractive options across our business to drive future growth and benefit from the expertise, financial strength and flexibility to deliver them.”