British Land said it was lifting its dividend as it reported rising earnings and profits in the six months to end of September and said its London offices were securing a "disproportionate" number of top leases.
The real estate investment trust reported underlying profit of £155 million, up 8% from £143 million. Its underlying earnings per share was 15.4p, up 1%, and it announced a dividend per share of 12.32p, up 1% (half year 2025: 12.24p).
The group said it was prioritising capital allocation towards "best-in-class office developments" and retail park acquisitions while pausing on urban logistics developments until the "time is right".
Speaking to CoStar News, chief executive Simon Carter, said: "The key theme is one of momentum. This is a period where profits and values are up and we have seen strong leasing and that accelerated as we went through the six months. The new news since our recent trading update is October and November have been very busy for us. We had 300,000 square feet go under offer in the period and now there is 800,000 square feet in negotiations. And demand is stronger because of clear factors such as the stronger return to the office, the tailwinds from increased demand from AI companies – we estimate that is around 1.5 million square feet of new demand – and of course supply is very constrained. Our campus proposition is really resonating."
In terms of investor attitudes to prime London offices, Carter said: "I think the rental dynamic is now, increasingly, consensus. The evidence has come through, and more investors are looking to deploy here."
Carter said, in addition, deals under offer and occupancy levels are high across its retail parks. "Because of the rental growth we are rack-rented which means we are feeling pretty good about future [estimated retail value] growth."
Carter said the REIT is taking a "natural pause" on urban logistics. "We have delivered our first scheme in Southwark and are under negotiations with tenants. We want to see good rental growth come through and then we will return. At present the best return and use of our capital is to focus on office developments and the retail parks."
About next week's Budget, Carter said: "We care a lot about the path of long-term interest rates so we want a Budget that reassures the bond market. But we also want it to have confidence in it and growth. A little bit of growth can really eat into the government's deficit. As our results show, businesses are there to expand and to do deals in London."
In a statement with the results, Carter described "good operational and financial performance in the first half of the year", underpinned by the strong occupational fundamentals of its core sectors of prime London office campuses and retail parks.
"We are capitalising on these tailwinds to drive performance and capture reversion, delivering 4% like-for-like net rental income growth on the standing portfolio. This, combined with a 12% reduction in admin expenses, more than offset higher funding costs and delivered earnings growth in the half."
Carter said that thanks to strategic calls made in 2021, the REIT is the market leader in London office campuses and retail parks, positioning it to benefit from what he estimated is a 10 million-square-foot shortage of prime offices in central London and a rapid expansion of retailers out of town.
"We are on track to deliver [our] 8-10% total accounting return target through the cycle, underpinned by sustainable earnings per share growth of 3-6% per annum, with at least 6% expected for FY27.”
British Land said portfolio occupancy is at 95% with campuses at 92% and retail and London urban logistics at 98%.
The REIT leased 1.4 million square feet across the portfolio, 5.3% ahead of ERV, with 1.3 million square feet under offer, 7.5% ahead of ERV. Campus leasing was at 486,000 square feet, 3% ahead of ERV, with 629,000 square feet under offer, 6% ahead of ERV. It said this leasing is accelerating post-period-end with 308,000 square feet under offer and 819,000 square feet in negotiations.
The like-for-like net rental growth of 4% was split between campuses 7% and retail and London urban logistics 2%. The 1.2% rise in portfolio values was split between campuses 0.9% and retail and London urban logistics 1.6%.
The company flagged particularly strong activity at its Broadgate campus by Liverpool Street station in the City. It said it has only one office floor available to lease in developments that are not onsite, which is the top floor at of its new scheme, 1 Broadgate. It expects to set record rents for the campus there.
Since 1 October it has gone under offer on 56,000 square feet at its its latest scheme at 1 Triton Square and it estimates it is capturing a disproportionate share of "what is a strong market", estimating seven out of the top 20 leasing deals under offer across London are in its portfolio.
BL says the "return to office" has exceeded most expectations, including its own, with office use at its campuses now above pre-Covid levels on Tuesday to Thursday, and with Monday increasingly catching up. It says occupiers relocating increased their floorspace by an average of 38% in 2024.
This was mirrored for larger requirements, the company added, with 88% of deals above 100,000 square feet enlarging on their current space, which includes its deal with Citadel at 2 Finsbury Avenue. The number of active requirements over 100,000 square feet in Central London was 36 at the end of September 2025, 40% ahead of the 10-year average, playing directly to the "strengths of its campus developments".
British Land said retail parks now made up 32% of its portfolio, up from 15% when it first updated its strategy in 2021.
It said its London urban logistics portfolio has "embedded development optionality" and it remains positive about the long-term supply demand dynamics of the sub-sector. But it said it will progress those schemes when "the time is right" and given the sub-sector is cyclically weaker today, it is prioritising capital allocation towards "retail park acquisitions and best-in-class office developments".
EPRA net tangible assets per share were at 579p, up 2%, while the loan to value crept up to 39.1% (full year 2025: 38.1%).
The period saw £59 million of assets disposed of, at an average of 5% above book value, while £52 million of retail was bought, principally two retail parks, at 8.4% topped-up net initial yield. It is progressing an 1.7 million square feet committed development pipeline on a "de-risked, capital light basis".
Its outlook is for like-for-like net rental growth of circa 5% for full year 2026 and it reiterated its guidance of 3-5% per annum ERV growth across the portfolio.
Analysts at JP Morgan described the results as: "Overall, a solid update, which given the detailed trading update a few weeks back offers few surprises."