British Land portfolio value dented by higher interest rates

British Land said on Wednesday that the value of its portfolio declined in the year to the end of March as higher interest rates had an impact on property yields.

The portfolio value fell 12.3%. Meanwhile, underlying profit rose 6.9% to £264m, driven by "strong" like-for-like rental growth of 6%. In addition, the company said the occupancy across its portfolio was high, at 96.7%.

However, the IFRS loss after tax for the year was £1.04bn, versus a profit of £965m a year earlier. British Land said this mainly reflects "the downward valuation movement on the group's properties and those of its joint ventures as property values adjusted to the higher rate environment, offset by the mark-to-market movement on the derivatives hedging the interest rate on our debt".

Chief executive officer Simon Carter said: "Whilst we remain mindful of ongoing macroeconomic challenges, the upward yield pressure appears to be easing and there are early signs of yield compression for retail parks."