Meadowhall shining light in tough market for British Land

PROPERTY giant British Land today said Meadowhall Shopping Centre remained one of its prime investments as the company reported £3.2bn of annual markdowns in property values.

The group, which saw its portfolio valuation drop by 28.2% over the year to £8.6bn, said there were signs of renewed investor interest, but a lack of availability of debt and the uncertain economic outlook was hindering activity.

Excluding the revaluation losses, British Land reported annual underlying profits of £268m.

British Land, which announced a £740m rights issue to underpin its balance sheet in February, sold a 50% stake in Meadowhall in Sheffield for £587.7m to London & Stamford Property earleir this year.

The UK’s second biggest property firm today said the move was part of a continued emphasis on sales because of the “financial turmoil” in the investment market.

Despite the upbeat message, however, Meadowhall’s value dropped by a quarter over the year to £573m.

Chairman Chris Gibson-Smith said that despite underlying pre-tax profit for the year ended March 31 dipping to £268m from £284m and there being a pre-tax loss on ordinary activities of £3.9bn,  British Land’s performance had “shown resilience”.

“Our activities have been decisive, including the rights issue, looking to secure the Company’s position and preserving its options for the future,” he said.

The group said the formation of the joint venture with London & Stamford at Meadowhall underlined the centres “enduring investment and occupier appeal”.

It said Meadowhall’s perrformance continued to be positive, with new tenants including Molton Brown, Yo! Sushi, Hollister and Kurt Geiger.

British Land said the recently completed St Stephen’s Shopping Centre in Hull was attracting shoppers and had established itself as a leading centre in the region.