Retail Parks strength helps to lift British Land to solid half-year results

An improvement in rental income and reduced costs enabled British Land to deliver “a good operational and financial performance in the first half of the year” translating into solid earnings growth.

And concentrating on its now-core mix of retail parks and prime London offices continues to do the trick, helping the real estate investment trust (REIT) maintain its course for a positive full year.

“We are capitalising on these tailwinds to drive performance and capture reversion,” said chief executive Simon Carter in its half-year trading statement to 30 September.

It produced an overall 4% like-for-like net rental income growth across its now 95%-full portfolio, with retail park rents up 2%. Combining this with a 12% reduction in admin expenses, which “more than offset higher funding costs and delivered earnings growth in the half” helping underlying profit rise 8% to £155 million.

It also reported a 1.2% rise in the value of its UK property portfolio as the landlord was boosted by those rising rents.

Carter added: “As a result of the strategic calls we made back in 2021, we are the market leader in… retail parks, positioning us well to continue to benefit from the… rapid expansion of retailers out of town.” 

He added: “We are on track to deliver 8-10% total accounting return target through the cycle, underpinned by sustainable EPS growth of 3-6% per annum, with at least 6% expected for FY27.”