British Land reports strong rental growth, reiterates guidance
By Josh White
Date: Thursday 22 May 2025
(Sharecast News) - British Land reported a 4% rise in underlying profit to £279m for the year ended 31 March on Thursday, supported by strong rental growth and high occupancy across its campuses and retail assets.
Underlying earnings per share were flat at 28.5p, with the full-year dividend also maintained at 22.8p per share.
Occupancy stood at 98% across the portfolio, with 3.3 million square feet leased during the year at rents 8.6% above estimated rental values (ERV).
Retail and urban logistics assets were particularly strong, delivering 5% like-for-like net rental growth and a 7.1% increase in retail park valuations.
ERV growth across the total portfolio reached 4.9%, with British Land reiterating guidance for 3% to 5% annual growth going forward.
Net tangible assets rose 1% to 567p per share, while total property return was 6.9%.
The company completed £597m in disposals and acquired £738m of retail parks at a blended net yield of 7.1%.
Development activity progressed on 2.4 million sq ft of committed pipeline projects.
The balance sheet remained stable, with a loan-to-value ratio of 38.1% and £1.8bn in undrawn facilities and cash.
British Land said it raised £1.3bn in new finance during the year, and completed a £301m equity placing.
Net debt-to-EBITDA rose to 8.0x from 6.8x.
British Land said it also continued to improve the sustainability profile of its portfolio, with 68% now rated EPC A or B, up from 58% a year earlier.
It retained a five-star GRESB rating, scoring 100/100 for its developments.
Looking ahead, the group said it expected underlying profit to rise 2% in the 2026 financial year, with underlying earnings per share remaining flat.
From 2027, it anticipated annual earnings growth of 3% to 6%, including contributions from its development pipeline.
"I am pleased with our strong operational and financial performance this year," said chief executive officer Simon Carter.
"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 the company's key markets, and the resulting above inflation rental growth, gave the company confidence for the future and in its strategy, despite ongoing macro volatility.
"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% to 5% per annum rental growth across the portfolio."
At 0953 BST, shares in British Land Company were down 4.03% at 395p.
Reporting by Josh White for Sharecast.com.
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