British Land’s decision to rebuff Meta’s alternative tenant, for the 360,00 sq ft space at 1 Triton Square they never occupied, has been reported as a “sign of confidence in the London office market”. It did indeed seem a bold move, at the time, to take back the space, although it did come with £149 million. It has also given BL the opportunity to refit floors for laboratory space, re-position Triton Square and Regents Place, and secure higher rents, re-letting in the life science markets.
This decision, in reality, reflects British Land’s confidence in its own product and portfolio. Its office vacancy rate is at 4%, which is around half the London rate, and tenants have signed leases for 368,000 sq ft in the past six months, at rents 7.5 per cent higher than valuers’ estimates. The wider office market, on the other hand, has struggled with rising vacancy rates and plunging property values as companies shift to working from home after the Covid-19 pandemic.
British Land expects its portfolio to buck this trend, as companies look for space with the best amenities and environmental credentials.
On consideration, it would seem to be more of an endorsement for the “Survival of the Fittest (for Purpose)”