CEO Q&A

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How is British Land responding to BREXIT?

We run British Land to take advantage of long term trends but also to be resilient, so we are positioned to operate in a range of market conditions – property is a cyclical business. The quality of the assets we own and the strength of our finances serve us well as we face the potential challenges of Brexit.

Brexit is just one factor impacting our markets. Technology is at the heart of many far-reaching changes we are seeing. In London, Brexit is accelerating the trends we are already responding to: how people work and live, the growth in creative and tech industries, and the relative decline in demand from traditional banks.

We continue to believe in London in the long term and are encouraged by the demand we are seeing from occupiers and investors for our buildings since the vote. However, we have planned for a period of uncertainty: we have moderated our speculative development risk and have continued to diversify our office occupier base. We have made good progress on leasing discussions and this puts us in a strong position to commit to new developments to generate incremental returns, while keeping risk at a sensible level.

Sales over the last year, including The Leadenhall Building, have reduced our leverage further putting us in a strong position to take advantage of investment opportunities we have created within our portfolio.

What makes British Land different?

We have a clear purpose at British Land to create Places People Prefer and this drives the business. We have a relentless focus on customers so we create the places they want; not just individual buildings but external environments too – it’s something I refer to as ‘inside and out’. And, we have the scale and capabilities to deliver on this long term approach.

This means we invest heavily in data and insights to understand what customers really want, informing where we allocate our capital. This ensures our properties reflect the changing way people live their lives and provide what businesses need to thrive.

By investing in well located schemes we can create great spaces alongside the broad range of amenities, experiences and services people want as their work and home lives becoming increasingly blurred. This is why our London campuses and multi-let retail centres are becoming more diverse and mixed use.

Our operational scale, expertise and long term approach mean we have the capacity and skills to make the investments required and to deliver the benefits.

It is the combination of all these things which makes us different.

You talk a lot about customer focus – why is this important to a property investment company?

Successful businesses understand and deliver what their customers want. For us the interesting conversation has been defining who our customers are. It’s not just the businesses who lease space at our retail centres and offices but also the people who work in them, the people who choose to shop and spend time there and the local communities who live in and around them. Understanding these different stakeholders and the reasons why they prefer one location to another is what creating Places People Prefer is about.

An outstanding place caters for all and often increases the connection between them. If your customers prefer your place then your business is well positioned for success. That’s why we focus on long term trends affecting how we work, shop and live and invest in our properties to ensure they remain relevant to our customers.

This means people not only want to be in and around our properties but want to stay there longer too. Our new Leisure Quarter at Glasgow Fort comprises restaurants, green public spaces and children’s pocket parks in which to gather, socialise and play. More car parking was also added in response to shopper feedback. This, with other investments, is changing the demographic of people shopping at the centre and footfall has continued to increase.

The centre and the retailers we attract. In turn, footfall has continued to increase and this is fuelling rental growth.

We are changing our London campuses too. Broadgate, once home to predominantly large City financial institutions, is becoming a seven-day-a-week location. It is the largest pedestrianised commercial space in London and is responding to the changing needs of office occupiers, benefiting from its position in a dynamic part of London and the opening of Crossrail. The way we are configuring buildings and offering more flexible space on more flexible terms mean we are already appealing to a wider range of occupiers. By adding more restaurants, shops and events we are broadening the appeal well beyond the employees of the businesses based there.