Record-breaking office rents in central London have helped one of Britain’s biggest landlords to post a 12.1pc rise in the value of its properties and a 20.5pc surge in net asset per share.
British Land’s portfolio is now worth £13.6bn, with offices driving much of the increase over the past year.
The FTSE 100 group completed the Cheesegrater tower last summer, and has now rented out 84pc of its 47 floors. Affinity Shipping is paying £90 a square foot to take space in the highest floors of the tower, thought to be a record-breaking amount and a sign that space is at an increasing premium in the City of London.
The cost of an office in a London skyscraper rose 7.7pc last year, making it the fourth most-expensive city in the world for high-rise rents, according to a recent Knight Frank survey.
While British Land is working on several other projects in the City, including 100 Liverpool Street, chief executive Chris Grigg said “we have got other irons in the fire” besides another skyscraper.
“We are happy to continue to develop, but we don’t happen to have a tower project at the moment, particularly given the price of land,” he added, noting that the cost of development sites was being driven higher by expectations that rents will continue to spiral.
Mr Grigg said the general election had not made a dent in demand for London office space, and that, to date, there was no sign of the impending EU referendum putting the brakes on activity. “Do I think it’s having an impact on the market at the moment? No, but could that change? Of course.”
Elsewhere in London, British Land recently spent £135m to acquire the final plot of land in a 46-acre regeneration site at Canada Water, ahead of a planning application next year.
The firm intends to build a town centre containing shops, offices and homes in what Mr Grigg said would be “genuinely mixed use”.
British Land has also rejigged its portfolio during the year, selling more than £900m-worth including a property swap deal with Tesco that refocused its supermarket holdings in favour of the South of England.
British Land also sold 18 super-prime flats at Clarges Mayfair for £210m, although the apartments will not be finished until 2017.
The company lost out to Land Securities in the bid to take a £656m stake in Bluewater shopping centre in Kent last summer. “We were happy to miss it at that price, to be clear,” said Mr Grigg. “That’s the nature of our business, we need to have capital discipline.”
Net asset value per share, a measure of the firm’s overall value, rose 20.5pc to 829p in the year to the end of March. The firm declared a full-year dividend of 27.68p, up from 27p in the prior year.
Underlying pre-tax profits rose 5.4pc to £313m.