British Land Sees Strong Demand as Office Attendance Accelerates

British Land (LON: BLND) has issued a trading update for the six-month period ended September 30, 2025, signaling robust occupational fundamentals in its prime London office campuses and retail parks.

The company anticipates full-year 2026 underlying earnings per share (EPS) of at least 28.5p and projects growth of at least 6% for FY27.

Underlying profit for H1 reached £155 million, up from £143 million in the first half of the previous year. This translates to underlying EPS of 15.4p, a slight increase from 15.3p in HY25, showing sustained earnings growth.

The company's portfolio valuation increased by 1.2%, driven by ERV growth, with Retail & London Urban Logistics up 1.6% and Campuses up 0.9%. This valuation increase contributed to a total accounting return of 4.0% for the first half, aligning with the company's target of 8-10% for the full year.

British Land is actively recycling capital, having disposed of £59 million in assets at an average of 5% above book value. Simultaneously, the company acquired £52 million in retail assets, primarily two retail parks at an 8.5% Topped Up Net Initial Yield (NIY).

Leasing activity has been strong, with 1.4 million square feet leased across the portfolio at rates 5.3% above Estimated Rental Value (ERV). An additional 1.3 million square feet is currently under offer, at rates 7.5% ahead of ERV. Like-for-like net rental growth stood at 4%.

The company's campus portfolio saw 0.5 million square feet of leasing, 3.0% ahead of ERV, with a further 0.6 million square feet under offer, 6.0% ahead of ERV. Occupancy for campuses is at 92%, with 88% occupancy on an EPRA basis, with like-for-like net rental growth of 7%.

Retail and London Urban Logistics experienced 0.9 million square feet of leasing, 7.3% ahead of ERV, and an additional 0.7 million square feet under offer, 9.5% ahead of ERV. Occupancy is at 98%, with retail parks specifically at 99%. Like-for-like net rental growth of 2% reflects near full occupancy.

“Given the strength of demand, we have been proactive in the period in taking back and re-letting space, securing surrender premia and capturing reversion across the portfolio,” the company stated.

Meanwhile, CEO Simon Carter noted that “occupational fundamentals continue to favour our prime London office campuses and retail parks. Office attendance is accelerating, retailers are expanding out of town, and supply remains very constrained across both markets.”

British Land is benefiting from increased take-up of space from AI businesses, particularly in the Knowledge Quarter. Since April, the company has leased space to 11 AI-led businesses. Regent's Place is being repositioned as a science and technology campus, with 49,000 sq ft leased to such businesses.

The trading update reinforces British Land’s guidance for future ERV growth of 3-5% per annum across its portfolio. The company expresses confidence in meeting current market expectations for FY26 underlying EPS, targeting at least 28.5p, with projected growth of at least 6% for FY27.