British land has seen over £1bn wiped off the value of its portfolio which it has attributed to a shift in online shopping that has been accelerated by the coronavirus pandemic.
The value of its portfolio, which includes prime central London properties, fell by over 10% from £12.3bn to £11.2bn during the year ended 31 March 2020. The fall comes off the back of the value of its retail portfolio plunging by 26% to £3.8bn.
The property company also revealed pre-tax losses of £1.1bn up from a loss of £320m the previous year.
It also revealed that it has released smaller retail, food and beverage and leisure customers from rental obligations for three months to June and around £35m of rent has so far been deferred to customers experiencing financial challenges as a result of Covid-19.
As a result it has so far only collected 43% of rent from retail tenants for the first quarterly bill of the year.
However, the company said it is still “well positioned” for today’s challenges with around £1.3bn of undrawn facilities and cash with no requirement to refinance until 2024. It also said it has “significant headroom” to debt covenants and that the group could “withstand” a further valuation fall of 45% before any mitigating actions.
CEO Chris Grigg said: “Like businesses around the world, in recent months our focus has been on responding to the unprecedented challenges brought about by Covid-19. We have acted quickly and effectively to support our customers, partners and local communities and to protect the long term value of our business.
“Throughout this time, the safety and wellbeing of our team has been our key priority. Now, more than ever, we are benefitting from their expertise and experience and across our business, they have demonstrated their commitment, resilience and good humour for which I and the Board are extremely grateful.”
He added: ”…Near term, we are expecting the offices market to be more cautious, but we continue to conduct virtual viewings and are encouraged by negotiations we are having. In Retail, given current valuations and the lack of liquidity in the investment market, our focus is on delivering value though asset management, working to keep our places full and exploiting demand for assets which support an online offer.
“Our financial position is robust with debt low, significant covenant headroom and access to £1.3bn of undrawn facilities and cash so we are well placed to weather today’s challenges and succeed in the long term.”