Chris Grigg’s decade of re-engineering British Land - from crisis to campuses

Chris Grigg joined British Land from the banking sector in the depths of the global financial crisis in January 2009. The UK’s third-largest listed property company has been on a decade-long roller-coaster ride since; Grigg has cut exposure to retail, boosted the office component of the portfolio, entered the residential market and turned its focus on creating ‘living campuses’ while navigating the Brexit storm of the past three years.

Chris Grigg

Chris Grigg is chief executive of British Land, a constituent of the FTSE100. Since taking the role in 2009, he has put placemaking, wellbeing and design excellence at the heart of British Land’s approach to real estate. This is summed up in the company’s strategic focus on creating “Places People Prefer”.

“It was certainly an interesting time,” British Land’s CEO noted of the global financial crisis with managed English understatement. “Obviously, there was a lot to be done at that stage. UK real estate companies had gotten themselves somewhat over-geared. There was a great deal of uncertainty, not just in the real estate capital markets but capital markets more broadly, and there was a real risk of an economic depression in the UK.”
With a background in banking, Grigg was “not exactly surprised” there was financial stress in the system. His first job was to steer British Land through that period of uncertainty by raising equity, as did most of its peers in the sector.
“It absolutely needed to be done and it also enabled us to buy assets, which was a good thing. We have subsequently raised equity and also bought back equity in the past ten years.” During that period, British Land has gradually reduced its leverage from 47% in early 2009 to its current level in the mid-20s.
“We feel that’s a good position for a UK real estate company to be in. It puts us in a very strong position in a time like this when there are different sorts of uncertainties,” Grigg said.

Offices now account for a larger portion of the mix than in 2009

One of the structural challenges the company had faced under Grigg’s tenure was its heavy focus on retail at a time when the impact of e-commerce had intensified in the bricks-and-mortar world. Since April 2014, British Land has sold a total of GBP 2.8 billion of retail assets, and Grigg has steered the portfolio towards a significantly higher share of offices and also, more recently, added residential properties to the mix. Compared with 2010, the share of retail has been cut from 66% to 49% and the representation of the sector is now virtually on a par with the office component -- which has climbed in tandem over the past ten years to 48% from 33%.
Over the same period, the focus has increasingly been on ‘campuses’ or ‘managed environments’ rather than standalone or single-use buildings. Grigg explained: “It’s all about owning enough real estate in a single space so you can control or influence the broader environment and offer people the opportunity to do a number of different things inside the office and outside, such as retail, food and beverage, restaurants, bars and residential. That’s one of the reasons we talk increasingly about placemaking and mixed-use as really being things that fit that global pattern of the way people are spending their time, the way they want to engage with physical real estate. I think it’s quite a complicated picture but also a very exciting one.”
He cited the example of Paddington Central in London where a canal runs along the edge of the office estate. “When we first bought that space in 2014, it was as if the campus had turned its back on the canal. Now the company is the proud owner of a number of canal boats that really enliven that space. We are actually creating places, and that is a bug that gets to lots of people who work in the sector.”
At present, British Land’s mixed-use ‘campuses’ ­– which include Broadgate and Paddington Central in London – account for roughly 80% of the company’s office assets. A measure of the success of that strategy is that the bars and restaurants at the Broadgate circle are sometimes busier during the weekend than some days of the week, Grigg pointed out.
“That’s a pretty cool thing that also creates capacity for an upward-moving spiral. As you get the footfall, you can attract more interesting restaurants. For example, we brought Eataly to Broadgate, its first location in the UK. Historically, people would have said there was no chance of getting a tenant like Eataly into an office estate on the edge of the City of London. But then we started talking to people about the size of the footfall that is already there with Liverpool Street Station, and then with Crossrail arriving. When we started looking at the footfall up and down Bishopsgate, we discovered it was one of the busiest streets in London. Suddenly you’re then having a different conversation with retailers and operators.”
Broadgate Circle

The campus strategy appeals to institutional investors

Another measure of the success of the campus strategy is its appeal to the world’s largest institutional investors. Broadgate is owned in a 50-50 joint venture with Singapore-based GIC. Meanwhile, British Land’s prime retail asset, Meadowhall Shopping Centre in Sheffield, is owned in a 50-50 joint venture with Norwegian sovereign wealth fund Norges.
In early February, Norges announced it is integrating its non-listed and listed real estate operations into NBIM, its management organisation, and removing the targeted portfolio allocation to real estate of 7.0%. The fund will now aim to have a real estate portfolio in the order of 3.0% to 5.0%. Norges also acknowledged criticism, however, of the high costs associated with its non-listed real estate investments, that chimes with the conclusions of a major EPRA-sponsored research of institutional investors by the CEM research organisation last year.
The move is potentially positive news for the listed real estate sector, Grigg suggested. “We have talked with them about this announcement, and we’re very relaxed about it. Norges is a longstanding partner of ours, and we are very comfortable with the relationship, and we expect it to continue. They’re a big fund, and I’m sure we’ll find ways of continuing to work with together including the current joint venture.”
Under British Land’s current five-year strategy, the share of offices in the portfolio will increase just slightly, while retail will be cut further to 30-35%. Meanwhile the company aims to enter the residential market and grow its share to 10% by 2024. Residential fits well into the curated environment strategy, Grigg said: “For us residential is attractive, in particular the build-to-rent segment. But build-to-sell is also an interesting piece of the future for us; it won’t be relevant everywhere for a bunch of reasons. For example, the City of London has always been pretty reluctant to have much residential within the square mile. It’s obvious that you can’t do it at Broadgate but, on the other hand, it might be possible to do things not many miles from Broadgate, and it will likely be very important with respect to our new developments at Canada Water. That will be mixed-use in the classic sense, and residential will be a big part of that.”
The planning application for Canada Water ­– a 1.8 million ft2 mixed-use development ­– was submitted last May and a decision is expected this Spring. The campus will comprise one million ft2 of workspace and 250,000 ft2 of retail and leisure space, as well as 650 residential units.
Meadowhall Shopping Centre in Sheffield

Storey is part of the customer-engagement story

As part of its goal to become more relevant to a broader range of customers, British Land recently created a flexible office space provider called Storey, which enables it to engage with smaller companies than the traditional larger occupiers it is associated with.
“The second thing it enables us to do is speak to larger companies about their flexible or near-term as well as their longer-term requirements. We think that has a competitive advantage for us,” Grigg said.
The company’s increased focus on customer engagement has gone hand in hand with the diversification of its employee base, he noted.
“To engage well with your customers, you have to be a bit more like your customers. When I arrived here, typically if there was such a thing, the average professional employee was almost certainly either an accountant or a surveyor. Today, we have much more of a range of backgrounds and skill sets in the organisation as well as broad diversity from a gender perspective.”
In many ways, Grigg has come full circle at British Land, faced again with macro-economic and geopolitical challenges, exacerbated by Brexit.
“Although the world is a less certain place than what we’ve been used to, financial conditions remain pretty good, and they’re very different from 2009. It’s a bit tougher than it was two or three years ago, but it doesn’t feel as if we’re about to stagger into another global crisis. I don’t think that’s going to happen. But my job is to ensure that if it does, British Land is resilient, more resilient than it was in 2009, and I am very comfortable that the company is,” he concluded.


  • London currently represents 60% of British Land's portfolio, up from 40% in 2010

  • Westend accounts for 63% of the office portfolio compared to 35% in 2010

  • NAV per share stood at 939p (Sept 18) vs 504p YE 2010