Land Securities Group Plc, the U.K.’s largest real estate investment trust by market value, said vacancies at its properties were little changed as demand for stores and offices in London grew.
Vacancies were 2 percent in the quarter ending June 30, about the same as the previous three months, the London-based company said in a statement today. Retail properties were 97.2 percent leased, and the number of visitors to Land Securities’ malls fell 2.9 percent from a year earlier. Stores with tenants in administration, a U.K. form of bankruptcy, accounted for 1.2 percent of vacancies, compared with 1.3 percent in the first quarter.
“The retail markets across the U.K., they remain pretty difficult,” Chief Executive Officer Rob Noel said in an interview. “We’re working very hard to keep the portfolio full, which we are, because we’re in the right places, but it’s a tough game.”
Britain’s commercial property market is improving as lenders become more willing to provide credit and overseas real estate buyers look beyond the London area, research firm Investment Property Databank Ltd. said earlier this month. Ernst & Young’s Item Club on July 15 raised its U.K. economic-growth forecast for this year to 1.1 percent from 0.6 percent in April on expectations of a pickup in consumer spending, which may boost demand for retail space.
Demand for stores and office buildings in the U.K. capital is increasing, Noel said in the statement. Three stores being developed next to Piccadilly Lights in central London have been pre-leased to Barclays Plc, Gap Inc. and Alliance Boots Plc, according to the statement.
Land Securities won local-government approval on July 9 for what could be its most profitable development project, a plan to turn an office tower in London’s Victoria neighborhood into 206 apartments. No decision has been made on whether to bring in a partner to develop the property, Noel said by phone.