London’s commercial real estate market is showing no signs of dimming, the UK’s biggest property company said on Wednesday, but the retail market is still “challenging”.
“In London, demand is increasing,” said Robert Noel, chief executive of Land Securities, as the company reported that property vacancies were little changed from the previous quarter at 2 per cent.
“The retail market remains challenging but we are maintaining very high levels of occupancy in our centres and are pleased with our increased exposure to leisure.”
His comments came as details were revealed of two deals worth more than £90m, one involving Land Securities property near a prime Oxford Street location.
Great Portland Estates said it had entered into new rights of way and light arrangements between its development at 73/89 Oxford Street and Land Securities’ adjoining property at 7 Soho Square, W1.
Separately, GPE said it had also exchanged contracts to acquire nearby Oxford House, a big commercial building at 76 Oxford Street, on the corner of Newman Street. The combined price for the two transactions was £91.5m.
Land Securities said it had £5.5m of development lettings signed since April 1 and had a further £12.3m in the hands of solicitors.
Among its more prominent London landmarks, it said the “walkie talkie” skyscraper it is developing jointly with the Canary Wharf Group at 20 Fenchurch Street, EC3, was 52 per cent pre-let, while 62 Buckingham Gate, a large office building in Victoria, was 10 per cent let with a further 43 per cent in solicitors’ hands.
“Despite a number of retailers going into administration since April including Dwell, Modelzone and Ortak, our units in administration were down at 2.2 per cent at 30 June 2013 compared to 2.3 per cent at 31 March 2013,” the company said in a statement.
“In particular, six of the seven units previously let to Comet have now been relet, with two of these being post June 30. Since June 30 we have also agreed terms for the reletting of five of the six remaining HMV stores and the continued occupation of Republic on temporary, rolling one-month leases giving us control over these units as we consider our options.”