British Land jumps the gun with restoration of investor payouts

Linda J. Dodson

Bankruptcies are on the up and tenants are renegotiating rents in increasing numbers at much lower rates than before, and at levels that will be set for years to come.

And although occupancy levels are around 95pc pre-Covid levels, physical occupancy is far lower. Just 18pc of the desks found in its London office blocks are being used, while just 65pc of the retail and food & beverage outlets serving office workers have reopened. That is plainly unsustainable.

But perhaps that’s not even the real issue here. Even if British Land can afford to pay a dividend, that doesn’t mean it should. Companies that continue making payouts through the pandemic will find they have lost all moral force if and when it becomes necessary to lobby the Government for help again.

Take Tesco. Its decision to recycle a business rates holiday into shareholder dividends means there is no hope of receiving a second one, or any further state support. Fortunately, it probably won’t need it, in the same way supermarkets never needed a bailout in the first place.

But with another national lockdown potentially looming can British Land be equally confident? It must be because any negotiating position it had before has probably just disappeared out the door with its departing chief.

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