British Land said it was reporting strong operational and financial performance in full-year results, with values lifted in particular by a supply squeeze for its preferred sectors of retail parks and London offices.
The leading UK real estate investment trust reported underlying profit up 4% at £279 million and underlying earnings per share steady at 28.5p (full year 2024: 28.5p). It announced a dividend per share of 22.80p, the same as for full-year 2024.
The total property return was +6.9%. EPRA net tangible assets per share were 567p, up 1%, while the loan to value was 38.1%, in slightly from 37.3% in full year 2024.
Values across the portfolio were up 1.6%, with a lift over the period from +0.2% in the first half to +1.5% in the second half. That broke down to its campuses at minus 0.8%, retail and London urban logistics at +5%, and retail parks at +7.1%. BL flagged a rise in its campus valuations, largely driven by the development pipeline, with values in the second half of 2025 at +0.8% against minus 1.7% in the first half.
The portfolio valuation is now £9.486 billion, up from £8.684 billion last year. BL said that 68% of its portfolio is now rated EPC A or B, up from 58% at full year 2024.
The REIT is reiterating its guidance of 3-5% a year estimated rental value growth across the portfolio and expects full year 2026's underlying earnings per share to be broadly flat, which equates to underlying profit growth of 2%. It expects 3-6% per annum earnings growth in subsequent years, including around 4p of underlying earnings per share from developments in full year 2027.
Speaking to CoStar News, David Walker, its chief financial officer, said it had been important to provide earnings guidance to demonstrate the levers the REIT is pulling to ensure profits come through from its developments and how BL will capitalise on the strong fundamentals in its two core markets, central London office markets and retail parks.
"That is where 90% of our exposure is. We think the guidance demonstrates we are focused on earnings and driving that into cash."
Walker added that British Land was very confident about the demand and supply dynamics in its core markets. "We are into a year when there are very few tower floors being delivered into the City of London. Prelet talks at 2FA [its 2 Finsbury Avenue Broadgate office] for instance are now at £110 per square foot plus, and that doubling of rent over the last few years at Broadgate is feeding through. Successful retailers are also being very public about how open-air well-located retail parks are their preferred formats. Supply is constrained here and we are capitalising on the supply-demand tension."
In terms of the macroeconomic picture, Walker said: "We need stability in terms of where we understand interest rates will settle. The wider tail risk is that the global volatility around recent political announcements on tariffs might mean slightly longer in terms of decision-making by occupiers but the day-to-day volatility does appear to have died down which can only be a good thing."
Simon Carter, chief executive, said in a statement with the results: “I am pleased with our strong operational and financial performance this year. We continue to lease space at rents significantly ahead of valuers’ expectations which, combined with good cost control and successful asset management, means we have maintained our underlying earnings per share, despite significant development activity which will be a key driver of future earnings growth. Values increased 1.6%, with a particularly strong performance from retail parks, up 7.1% and campuses returned to growth in the second half of the year, increasing by 0.8%."
Carter said the continued occupational strength of its key markets and the resulting above-inflation rental growth was making the company confident for the future and in its strategy, despite ongoing macro-volatility.
He added: "Return to the office is in full swing, with mid-week occupancy back to pre-pandemic levels, and value and multi-channel retailers are competing aggressively for space on our retail parks. This, combined with the acute lack of supply in both these markets is resulting in strong rental tension, which will translate into future earnings growth and underpins our guidance of 3-5% per annum rental growth across the portfolio.”
There was £2.2 billion of financing completed in the period, of which £1.3 billion was new finance. British Land said it has £1.8 billion of undrawn facilities and cash, with no requirement to refinance until late 2028.
The year saw £597 million of disposals, including its stake in the Meadowhall shopping centre in Sheffield, and its stake in 2 Finsbury Avenue in the City of London.
It reinvested this money into buying £738 million of retail parks, at a blended net equivalent yield of 7.1%. It raised £301 million via an equity placing in October 2024 and is pushing on with a 2.4-million-square-foot committed development pipeline.
The portfolio occupancy is at 98% with its campuses at 97%, and retail and London urban logistics at 99%.
It leased 3.3 million square feet, 8.6% ahead of the estimated rental value with 0.9 million square feet under offer, 15% ahead of ERV. That split into campus leasing at 1.5 million square feet, 7.5% ahead of ERV, with 0.3 million square feet under offer and as at 16 May 2025, a further 1.7 million square feet in negotiations.
In retail and London urban logistics there was 1.8 million square feet of leasing, 10.5% ahead of ERV, and 0.6 million square feet under offer.
British Land said the return to the office was in full swing and therefore it has committed to upgrading Broadgate Tower. The scheme is expected to complete in late 2026, where BL suggested the supply picture is particularly tight with only 12 tower floors available in the City. It expects to attract occupiers looking for well-located, high-quality office space in a thriving campus environment and said it is already in conversations on 100,000 square foot.
It said it is seeing "increasing enquiries and negotiations for the new space" it has just delivered at its massive Canada Water site.
BL said in the London office investment market, there are early signs that liquidity is increasing with £2.6 billion of transactions in the first quarter of 2025, up by nearly 30% on the previous quarter. It added that demand for larger lot sizes is also increasing with seven deals over £100 million transacted in the quarter compared with 10 deals in the whole of 2024. The REIT advised that if this trend continues, it will look to recycle capital out of its "mature, lower returning office assets".
Analysts at Peel Hunt described the results as "somewhat uneventful, with numbers broadly in line and guidance consistent with our expectations".