British Land reports interims and agrees pre-let with Aon
British Land and Oxford Properties today announced agreement on the pre-letting of 191,000 sq ft to insurance group Aon at their joint development, the Leadenhall Building in the City of London. The letting represents over 30% of the 610,000 sq ft office tower, which is under construction for delivery in mid-2014. Aon had agreed non-binding heads of terms on the lease in May.
Aon will occupy the lower 10 floors (levels 4-13) of the 47-storey building for an average lease term of 19 years to first break. Aon will also have options to take up further space totalling up to 85,000 sq ft on levels 14-18, the group added.
British Land unveiled the pre-let as it announced half-year results, with EPRA NAV up 4.2% at 591p per share and interim pre-tax profits of £132m, up 3.9%. The group’s portfolio valuation rose 2.2% to £10.2bn, with its offices portfolio up 5.3% and its retail portfolio rising 0.7%. Occupancy was 98.3% for retail and 97.7% for offices. Organic like-for-like rental growth was 1.1% for the half-year, split between 0.7% in retail and 1.8% in offices.
The group noted that the City offices market had been subdued, with signs that investor interest in secondary assets was weakening. It said financing was increasingly available only to the strongest operators in the industry, but said British Land had capacity to “capture upside when the economy improves”.