Property deal boost for BA at Heathrow
Tuesday 04 April 1995
Under a new agreement with British Airports Authority, BA has secured tenure on its key sites at Heathrow for 150 years, on much less restrictive leases.
The company said the new arrangements would enable it to value the properties on an open- market basis, and it has instructed Richard Ellis, the chartered surveyors, to carry out a revaluation of property assets. This will be taken into the accounts for the financial year just ended.
BA refused to give any more details, but analysts said they expected the revaluation to be substantial and to pave the way for a write-down of the stake in the US airline. Peter Bergius of Kleinwort Benson said: "It would potentially soften the blow of any write-down of USAir."
Other shareholders in the US airline have already written down their stakes, and Sir Colin Marshall, BA's chairman, has warned that such a move is on the cards.
The new agreement with BAA, the landlord, covers 224 acres at Heathrow, which had been let on a ground lease expiring in 60 years, with the next rent review five years away.
The deal gives BAA a five- yearly rent review linked to retail prices on 185 of these acres, over 150 years. Buildings on the site include the airline's Heathrow hangars and associated engineering workshops and its computer centre.
The other 39 acres has been let back to BA on a short-term lease at open- market rent. They will be handed back progressively to BAA over five years.
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