British Land bullish on rental guidance after solid first half

The company said rental growth accelerated in the six months to 30 September, with lettings 12% ahead of ERV.

ERV growth for the full year should now come in "at the top end of our previously guided ranges for FY24", the company said. Guidance currently stands at 2-4% for campuses, 3-5% for retail parks and 4-5% for London urban logistics.

Underlying profits were up 3.4% year-on-year at £142m in the first half.

However, the high-interest rate environment has dented the valuation of British Land's portfolio, which declined 2.5% to £8.7bn, with EPRA net tangible assets per share falling 3.9% to 565p. The valuation of retail parks and London urban logistics assets rose 0.2% and 0.6% respectively, but campuses dropped by 4%.

Nevertheless, British Land declared an interim dividend of 12.16p, up 4.8% on last year.

"Whilst in the past 18 months we have delivered good earnings growth, asset values have been impacted by the increase in interest rates," said chief executive Simon Carter.

"The geopolitical and economic landscape remains uncertain; however, with our portfolio yield now over 6% and an increased likelihood we are approaching the peak in UK base rates we expect the strong occupational fundamentals of our submarkets, together with the differentiated quality of our assets, to reassert themselves as the primary drivers of performance."

The stock was up 5.2% at 330p by 0834 GMT.