Facebook owner Meta has surrendered the lease on a building in London’s Regents Place, which has been earmarked by its landlord for a major new development.
Meta’s departure from the Regent’s Park-adjacent 1 Triton Square building, which is one of two buildings it has leased in the area, and analysts suggest the move is an indication of skittishness about real estate exposure among tech companies amid an uncertain economic outlook.
The property’s landlord British Land told investors on Monday that Meta had surrendered the lease for £149million, which it cautioned would result in a 0.6 per cent dilution of earnings per share, post interest savings, for the six months to March next year.
British Land plans to ‘reposition’ Regent’s Place as ‘London’s premier Innovation and Life Sciences campus’
However it said it was ‘comfortable’ with market expectations for 2024, ‘due to better collection of historic Covid arrears than expected’.
It also said the move gives it the opportunity to ‘accelerate’ plans to ‘reposition’ Regent’s Place as ‘London’s premier Innovation and Life Sciences campus’.
British Land is one of Europe’s largest listed real estate investment companies, with a portfolio valued at around £13billlion.
Regent’s Place is a 13 acre, full- managed campus, with over 20,000 workers and residents, sitting between tube stations Great Portland Street and Warren Street.
In addition to Meta, current customers include Amazon Fresh, HMRC and Atos.
But the development is currently repositioning to focus on life sciences and innovation.
British Land said 1.2million square feet of leasing was done across its broader portfolio in the five months to the end of August, with the returns 13.1 per cent ahead of estimated rental value (ERV).
The company last week raised its retail park estimated rental value growth outlook for fiscal year 2024 to 3 to 5 per cent, from 2 to 4 per cent earlier, driven by ‘significant’ leasing momentum in the business’.
British Land shares were up 1.6 per cent to 321.1p in early trading on Tuesday.
Simon Carter, CEO, said: Operationally we are seeing strong leasing activity which reflects the exceptional quality of our portfolio and has resulted in our recent upgrade of the expected ERV growth in retail parks.
‘We have also strengthened our balance sheet in the period and continue to actively recycle capital with the disposal of non-core assets ahead of book value.
‘Meta’s surrender of our building at 1 Triton Square also enables us to accelerate our plans to reposition Regent’s Place as London’s premier Innovation and Life Sciences campus.’
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