UK Commercial Property Re-gains Interest of Investors

British Land, one of the leading property investment companies in the UK plans to invest £500 million into property purchases, says Mr. Chris Grigg, chief executive of the firm. The shopping centre in Glasgow, Silverburn, is one the possible objects for purchase; furthermore, £2 more billion worth of potential property investments are under British Land’s consideration. The firm said that not more than £1 billion will be spent on property in the next 12 to 24 months. Mr. Grigg, however, mentioned that the investment strategy of the British Land will be very careful and disciplined as the future of the UK commercial property market is still hard to predict. Moreover, the investment strategy will have a certain framework, under which assets will only be held for set time periods. For instance, such property units as shopping centres will be held for 3-7 years, and disposed afterwards. Let us remind that the management of British Land decided to start working on its investment strategy after the sale of its 2 biggest assets – Meadowhall, a shopping centre, and Broadgate, an office development. The property investment firm also issued £740 million worth of right earlier this year, which also influenced the decision of British Land to expand its property portfolio. The position of British Land on the UK market improved as commercial property values started to rise after a 44% decline that followed the beginning of the economic downturn. Market improvements, caused by increased activity of cash-rich commercial property investors, resulted in the growth of British Land’s portfolio value to £8.3 billion (1.4% gain). Pre-tax losses of British Land also shrunk significantly, from £1.3 billion in 2008 to £113 million in the 1st half of 2009, as the commercial property market started to recover.