Proactive Investors - British Land Company PLC (LON:BLND) reported a drop in net asset value, but forecast top-end rental value growth, after an acceleration in the first half of the year.
“We are benefitting from our value-add strategy in campuses, retail parks and London urban logistics,” the property company said.
“These segments have the strongest fundamentals within the London office, retail and logistics sectors,” it added.
Simon Carter, CEO, said he was “pleased” with the performance with profits rising on the back of another strong period of leasing and good cost control.
“Rental growth has accelerated, with lettings 12% ahead of ERV [estimated rental value], and occupancy remains strong at 96% well above levels in the wider market,” he noted.
British Land now expects ERV growth at the top end of its previously guided ranges for the full financial year with Campuses up 2-4%, Retail Parks up 3-5% and London Urban Logistics up 4-5%.
The FTSE 250-listed property firm said in the six months ended 30 September 2023, underlying pre-tax profit rose 3.4% to £142 million from £138 million the year before while EPS climbed 3.4% to 15.2p from 14.7p.
EPRA net asset value per share fell 3.9% to 565p from 588p but the firm reported ERV growth of 3.2% with Campuses up 3.2%, Retail Parks up 4.0% and London Urban Logistics up 3.1%.
The firm remains comfortable with current market expectations for 2024 earnings.
Carter said 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".