British Land to concentrate on campus development as London becomes too expensive

New green space at British Land's Paddington campus - British Land

British Land is to take a new direction in its management of its London property, concentrating on building out three core “‘campuses”’ in the capital as investing in one- off buildings has become too expensive.

Speaking exclusively to The Daily Telegraph, Chris Grigg, chief executive, said the company, which is the second largest property firm in the UK, was moving away from stand-alone offices and investing in its trio of London campuses – in Paddington, Broadgate and Regent’s Place – in order to capture demand from tenants.

Last week the company launched a £300m share buy-back, saying buying its own shares was better value than investing in physical assets.

Mr Grigg defended the decision, saying: “We have lots of development opportunities, so we don’t really need to go out looking for them. ”

He added: “If you do go out to the market, there aren’t many opportunities around. A share buy-back is a way of accessing money in our own portfolio.”

British Land has recently launched a new office building at 4 Kingdom Street, Paddington, as part of a £100m programme to reshape the 1980s office estate, which also including adding more green spaces and better facilities.

British Land's Paddington hotel Credit: British Land

There remains a further development site for a large office building , which it plans to build in the coming years.

“We sense that [the working environment] is changing a lot everywhere, not just in ‘trendy’ tech firms,” Mr Grigg said, of the firm’s decision to pedestrianise the estate and add new coffee shops and bars. It has also recently agreed a deal to build a new new hotel tower on the site.

“People are focused on talent attraction and retention more than ever,” Mr Grigg said.

“It’s about productivity and getting people to work more effectively, and sometimes people want to work in a coffee shop outside their office.” He said British Land wouldwill employ similar tactics at a largehuge redevelopment project it is planning at Canada Water, he said.

He added that the company had “significantly reduced” its exposure to financial services businesses since he joined the firm in 2009, as demand from other firms for office space has increased.

“Being overexposed to any sector is probably a mistake,” he said.