The chief executive of British Land is stepping down after more than a decade in charge, as one of the UK’s biggest commercial landlords faces one of the most challenging periods in its 164-year history.
Chris Grigg, who has led the FTSE 100 group for 11 years, is set to step down in November and will be replaced by Simon Carter, who is currently chief financial officer, the company said on Thursday.
Mr Grigg’s departure comes as British Land grapples with the fallout from the pandemic. The company owns more than £11bn worth of offices and shops around the UK, with the bulk of its estate in London. Substantial estates in Broadgate in east London and Paddington, in the west of the capital, have been largely emptied by coronavirus although shoppers and office workers are now beginning to return.
“Like many businesses, we face short-term challenges because of the current Covid crisis, and we continue to respond to the longer-term structural changes in the way people are using real estate,” said Mr Carter.
The company’s portfolio lost about 10 per cent, or £1bn, of its value in the year to March as a result of coronavirus. The sharpest falls have come in its retail estate, which makes up just over a third of its overall portfolio.
Under Mr Grigg, British Land has pared back its exposure to the retail sector and focused more heavily on offices. The company will continue to pull back from retail but will also look at potentially developing residential and logistics properties, Mr Carter added. He held senior roles at residential developer Quintain and logistics operator Logicor before becoming chief financial officer at British Land.
The first challenge facing Mr Carter will be to restore rental income to normal levels. Like other commercial landlords, particularly in the retail sector, British Land has lost income due to its tenants withholding rent. The government introduced a ban on landlords evicting tenants or taking aggressive measures to collect rent in the wake of the lockdown in March. This is set to end on September 30, but commercial tenants have lobbied for its extension.
“The moratorium is important, it will be helpful when that ends, not because we’re kicking out customers but because it provides more clarity,” said Mr Carter.
He will also be tasked with reviving British Land’s flagging share price — which has fallen more than 40 per cent this year to £3.54 — when he takes over on November 18. Shares in the company fell 1 per cent on Thursday morning.
Another challenge will be reducing the company’s leverage, said Mike Prew, an analyst at Jefferies. British Land’s loan to value ratio was 34 per cent at the end of March.
Mr Carter will receive a basic salary of £750,000.