British Land is eyeing the transformation of Regent’s Place into what could become ‘London’s premier Innovation and Life Sciences campus’. This move follows the recent decision by Facebook’s parent company, Meta, to relinquish the lease on the 1 Triton Square building, situated near Regent’s Park.
While Meta’s release of the building is seen by many as a potential indication of unease about real estate investments among tech giants due to economic unpredictability, this recent change offers a silver lining for British Land. They announced to their investors on Monday that Meta’s decision to hand over the lease for a sum of £149 million might lead to a slight 0.6% earnings per share dilution after interest savings for the half-year leading up to next March.
Despite this, British Land remains optimistic, citing that they are ‘comfortable’ with 2024 market projections owing to a ‘better collection of historic Covid arrears than expected’.
British Land, standing tall as one of Europe’s leading listed real estate investment entities, boasts a portfolio worth around £13 billion. Their prominent Regent’s Place property spans 13 acres and hosts a workforce and resident community exceeding 20,000. This strategic location, nestled between the Great Portland Street and Warren Street tube stations, currently has a diverse clientele, counting Amazon Fresh, HMRC, and Atos among its occupants.
However, the emphasis on life sciences and innovation is set to redefine the direction for this prime real estate. The last five months leading to August saw British Land successfully lease 1.2 million square feet across its extensive portfolio, generating returns 13.1% above the estimated rental value (ERV).
This positive trajectory was further solidified last week when the company elevated its 2024 estimated rental value growth forecast for its retail parks to a promising 3 to 5%, driven by robust leasing momentum within the firm.