British Land upbeat as it works with Blackstone on Broadgate sale

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British Land (LSE: BLND.L - news) said it was doing well in a tough market but it stands to see the 50pc stake in Broadgate it sold near the bottom of the market to Blackstone (NYSE: BX - news) re-sold for a huge profit.

The FTSE 100 property company said in a trading update demand for space was “encouraging” despite a weak economic backdrop and a retail sector under pressure.

It confirmed that it would work closely with Blackstone on a potential sale of the private equity group’s stake in City office scheme Broadgate, while British Land will retain its 50pc stake.

British Land sold the stake to Blackstone in 2009 for £77m, but it jumped in value last year to around £520m after debt.

Chief executive Chris Grigg insisted yesterday the company did not regret the sale of the stake and said it shared the upside of the improved valuation on its retained stake.

“The sale we did at the time we did it gave us financial flexibility and strategic flexibility.” He said it gave British Land the opportunity to move ahead with developments that will generate future profits, as well as to invest in schemes in London’s West End.

The company said that despite high profile retail failures including HMV and Jessops since the beginning of the year, tenants in administration had only risen modestly from 0.8pc of income at the end of December to 1.2pc.

Mr Grigg said failures were a reflection of “changing consumer habits”, adding the company had planned for a weak retail backdrop.