(Reuters) - Property firm British Land said on Monday it expects annual rental growth at the top end of its previous forecast range, although yields on assets remain under pressure in a high interest rate environment.
Aggressive rate hikes have hit the investment business of British landlords, even as strong operational performance has fuelled a tentative sector recovery from pandemic lows.
British Land expects strong occupational fundamentals in its sub-markets despite the uncertain macro-economic environment, with its portfolio yield now more than 6% and an increased chance of UK base rates approaching their peak.
The FTSE midcap firm, which blends leisure, retail and hospitality facilities at its workspace-focused 'Campus' developments, said EPRA Net Tangible Assets - a key measure that reflects the value of its buildings - fell 3.9% to 565 pence, as of half-year end.
The Broadgate owner, which has a portfolio chiefly comprising office spaces and retail parks, said underlying profit for the six months ended Sept. 30 rose 3.4% to 142 million pounds ($173.7 million).
The London-headquartered firm said occupancy at its campuses remained stable at 96%, adding that it was comfortable with current annual market expectations.
($1 = 0.8173 pounds)