British Land Marks the Revival of UK Commercial Property Market

According to report by the Telegraph, on October 18th, the British Land, leading UK property investors, purchased an office development for £40.25 million, thus marking the recovery of the UK commercial property market.
Not only is this deal the first major breakthrough in London investment market in 2009, it is also the first acquisition of the leading property company – British Land – made since the beginning of the economic downturn in 2007.
After the deal between British Land and Aviva Investors on the purchase of an expensive property development on 39 Victoria Street in London’s West End Shares was agreed, British Land shares rose to 492 p. from 19.1 p.
British Land rented the large commercial property building of 76,000 sq ft out to Bank of America. The tenancy agreement is signed until July 2012 and stipulates an average rent rate of 47 per sq ft. Bank of America, in its turn, sublet the building to 9 other tenants.
The acquisition of the commercial property unit by the British Land contributed to the growing sentiment of UK commercial property market recovery. The company was the first to start purchasing commercial property sites, while other opportunities funds, that also felt like benefitting from a significant drop in commercial property, values took a more cautious approach.
According to the statement of head of offices at British Land, Mr. Tim Roberts, the acquisition of the West End property perfectly fits into the company’s strategy aimed at the expansion and balancing of office portfolio. Moreover, the building at 39 Victoria Street will provide the company with a long and strong income. He added that British Land might relet the offices at 39 Victoria Street later in 2013 when the commercial property market recovers and sees limited competition.