British Land upbeat as leasing activity picks up in Q2

British Land, whose flagship investments include Broadgate Circle in Central London and the Meadowhall shopping centre in Sheffield, achieved 1.2m square foot of leasing across its £13bn portfolio in the five months to 31 August, some 13.1% ahead of ERV.

Meanwhile, a further 1.1m sq ft was under offer, 17.4% ahead of ERV.

In the first quarter, leasing was 11% ahead of ERV while under-offer leases were 15.5% ahead of ERV.

In the Retail division, which accounted for the bulk of space leased during the second quarter, the company said it is now targeting retail park ERV growth of 3-5% for the full year, ahead of previous guidance of 2-4%.

"I am pleased with the continued momentum in the business. Operationally we are seeing strong leasing activity which reflects the exceptional quality of our portfolio and has resulted in our recent upgrade of the expected ERV growth in retail parks," said chief executive Simon Carter.

"We have also strengthened our balance sheet in the period and continue to actively recycle capital with the disposal of non-core assets ahead of book value."

Meanwhile, in the Campuses division, negotiations are continuing over 1.7m sq ft of space.

Late last year, Meta pulled out of a lease at British Land's 1 Triton Square at its Regent's Place asset. The surrender of the lease resulted in a £149m payment received this week, British Land said.

"Although this will result in a EPS dilution, post interest savings, of c.0.6p for the six months to March FY24 we are comfortable with current market expectations for FY24 due to better collection of historic COVID arrears than anticipated," the company said.

Carter sad that Meta's exit will enable the group to "accelerate our plans to reposition Regent's Place as London's premier Innovation and Life Sciences campus."