British Land, a leading property investor and developer, has made significant strides in its strategy to focus on high-performing sectors, demonstrating robust operational and financial growth. The company’s strategic investments in retail parks and campus developments are delivering strong returns, underpinned by rising demand for cost-efficient and sustainable spaces.
Key Achievements and Strategic Focus
Simon Carter, Chief Executive of British Land, highlighted the company’s momentum:
“Strong leasing levels, disciplined cost management, and focused investments have enabled us to grow profits and drive future growth despite a challenging environment. Our conviction in retail parks is paying off, with valuations and rental growth outperforming other subsectors.”
Since April 2024, British Land has disposed of £456m of non-core assets and invested £711m into retail parks, increasing its portfolio exposure to this sector from 15% in 2021 to 32% today. These parks are benefiting from robust retailer demand for cost-effective out-of-town spaces to support online operations, driving both rental and valuation growth.
Similarly, the company’s super-prime campus developments are capitalising on a severe shortfall of high-quality space, particularly in the City, where a 5 million sq ft gap is projected over the next four years. This imbalance is pushing strong rental growth at the premium end of the market.
Financial Highlights
British Land has reported a solid financial performance, including:
- Underlying profit: £143m, up 1%
- Dividend per share: 12.24p, up 1%
- Portfolio values: Up 0.2%, with retail parks rising by 5.1%
- Occupancy rates: 98% overall, including 99% in retail parks and 100% in London Urban Logistics.
The company raised £301m through an equity placing in October 2024, contributing to its ability to fund acquisitions and maintain liquidity, with £1.6bn in undrawn facilities and cash.
Operational and Sustainability Milestones
British Land’s operational achievements include leasing 1.7m sq ft of space at rents 8% ahead of estimated rental value (ERV). Retail and logistics spaces alone accounted for 759k sq ft of leases, reflecting the strong demand for modern, efficient spaces.
Sustainability remains central to the company’s vision, with 64% of its portfolio now rated EPC A or B, an increase from 58% in FY24. The portfolio achieved a 5-star GRESB rating, with developments scoring a perfect 100/100.
Outlook and Market Positioning
Despite external challenges, including geopolitical risks and market volatility, British Land’s portfolio is well-positioned to navigate market cycles. The company expects 3-5% rental growth across its portfolio and forecasts FY25 underlying earnings per share of 28.1p, reflecting accretive acquisitions and sustained leasing success.
Simon Carter concluded:
“With continued strength in occupational markets and our strategic focus on conviction sectors, British Land is set to generate attractive returns while driving long-term value through disciplined investments and sustainable growth.”
By leveraging its expertise in high-demand sectors, British Land is reaffirming its position as a leader in innovative and sustainable property development, ready to meet the evolving needs of tenants and investors alike.
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