British Land has seen annual growth in its half-year report, despite witnessing a 2.5% drop in its property value.

The property group, which owns a range of assets including offices, campuses and retail parks, has seen a 3.4% increase in underlying profit growth and a dividend share of 12.16p, an increase of 4.8%.

Its property occupancy across the company now sits at 96%, with campuses, retail parks and London urban logistics standing at 94%, 99% and 100% occupancy respectively.

However, the value of its properties overall hasas dropped by 2.5%, with campuses seeing a drop of -4% compared to the end of September 2022. Retail parks and London urban logistics properties saw increases of 0.2% and 0.6% respectively.

The firm also witnessed capital gains in the six months to the end of September 2023, which includes the sale of an office and data centre portfolio for £125m, 13% above book value at an NIY of 4.6%.

It also surrendered the lease at 1 Triton Square for £149 and acquired Thanet Retail Park for £55m at a NIY of 8.1%.

In line with these results, British Land said that it expects ERV growth at the top of its previously guided ranges for FY24, with campuses expected to see growth of between 2-4%, retail parks 3-5% and London urban logistics 4-5%.

It also said that it is "comfortable with current market expectations for FY24 earnings".

Chief executive officer at British Land, Simon Carter, said: "We are pleased with the performance in the first half with underlying profits increasing 3% on the back of another strong period of leasing and good cost control. We have seen yields continue to move out, but as we predicted in May, at a slower pace. Rental growth has accelerated, with lettings 12% ahead of ERV, and occupancy remains strong at 96% well above levels in the wider market.

"We are benefitting from our decision to pursue a value-add strategy across campuses, retail parks and London urban logistics. These submarkets have the strongest occupational fundamentals and highest rental growth within the office, retail and logistics sectors. We now expect ERV growth at the top end of our previous guidance for FY24.

"Whilst in the past 18 months we have delivered good earnings growth, asset values have been impacted by the increase in interest rates. The geopolitical and economic landscape remains uncertain; however, with our portfolio yield now over 6% and an increased likelihood we are approaching the peak in UK base rates we expect the strong occupational fundamentals of our submarkets, together with the differentiated quality of our assets, to reassert themselves as the primary drivers of performance."

Share Story: