British Land has bought sites that it says offer opportunities for urban logistics as it recalibrates its retail strategy.
The commercial and retail property developer today says it has bought an underground car park in London’s financial centre, and a shopping park in Thurrock, both of which offer “opportunities for urban logistics”.
The acquisitions come as the company focuses “more actively” on two strategy themes: retail and fulfilment, and technology campuses. It has bought underground Finsbury Square Car Park for £20m, and that its position close to its Broadgate campus offers “an excellent opportunity to create a last mile logistics hub in the City of London where supply for last mile logistics is highly constrained”.
It has also spent £82m on the Thurrock Shopping Park, off the M25 and close to east London, where occupiers include Decathlon, Adidas, TK Maxx, Iceland Food Warehouse and Pets at Home. This, it says, has an “excellent catchment where significant population growth is expected” – and which also offers a development opportunity for urban logistics.
The company is using the proceeds from property sales worth about £160m – including those announced today of Virgin Active Chiswick for £54.3m and the part sale of the Woodfields Retail Park, Bury for £37.5m – to finance these acquisitions as well as its investments in technology campuses including Peterhouse Technology Park in Cambridge and The Priestly Centre in Guildford. It has now committed to more than 1m sq ft of new development commitments since November 2020. Assets worth about £160m were sold or are under offer in the latest quarter of its financial year.
Retail and fulfilment currently accounts for around a quarter of British Land’s £12.7bn portfolio, with a focus on retail parks that are “aligned to the growth of convenience, online and last mile fulfilment”. Its strategy of focusing on urban logistics primarily in London, focused on development-led opportunities, sits alongside this.
British Land also owns and operates technology campuses at London’s Broadgate, Paddington Central and Regent’s Place.
British Land chief executive Simon Carter says: “We are delighted with the momentum we are delivering across our business as the economy reopens. Leasing activity at our London campuses has been strong, with a significant amount of space going under offer to a broad range of occupiers in the last two months.
“At the same time, we are continuing to deliver against our strategic priorities. We have sold off-strategy mature assets and will actively redeploy capital into opportunities that allow us to maximise our competitive advantage in asset management and development.”
British Land’s priority shift comes as a range of retailers and delivery apps from Deliveroo to Getir and Dija compete to offer ever faster fulfilment in UK cities including, preeminently, London. Grocers from Morrisons to Aldi (pictured) now use Deliveroo to get shoppers’ small grocery orders to them fast. And Ocado Zoom aims to have a network of more than a dozen micro-fulfilment sites in London but has encountered problems in finding suitable sites.