Property developer British Land has reported an operating profit of £143m in its H1 results, a figure up 1% on last year.

The group said that “strong levels of leasing” and “sustained cost discipline” had helped its profits to grow.

British Land, which was announcing its results for the six months to the end of September, said that a particularly strong performance in retail parks helped to offset residual yield movement in campuses.

Since April, the group has also disposed of £456m of non-core assets and rapidly deployed £711m into retail parks, which has become a preferred subsector for the firm due to their occupational fundamentals and high occupancy.

British Land chief executive, Simon Carter, said he was “pleased” with the operational and financial momentum of the group’s business.

Commenting on the firm’s retail park focus, Carter added: “Since 2021 we have increased our exposure to retail parks from 15% of the portfolio to 32% today. This conviction is paying off, with retailers competing for cost-efficient out-of-town space to support their online operations.

“This is leading to strong rental growth and valuation uplifts which are outperforming all other subsectors.”

However, property research analyst at Quilter Cheviot, Oli Creasey, said that following on from a “relatively positive message” last week by the firm’s peer LandSec, British Land’s results were “a little underwhelming”.

“As expected, the company’s retail assets have performed well,” Creasey said. “British Land is focused on out-of-town retail parks, one of UK property’s top-performing sectors this year, and the company’s performance is unsurprisingly strong.

“However, its central London campus portfolio is still struggling. The valuation move which has seen a fall of 1.6% in the half year is not enormous, but is behind the equivalent figure reported by LandSec, and behind recent analyst expectations.”

Creasey added: “British Land has been one of the better-performing REITs so far in 2024, but today’s results are likely to give investors pause. Comparisons to LandSec are inevitable for the company, and not favourable this time around. However, we do note that the opposite was true six months ago, and perhaps today’s news is simply a reversion to mean.”

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