Firm took 鈥榗ontrarian position鈥� on retail parks and London office space after Covid

Pre-tax profit shot up at British Land from 拢15m to 拢342m, according to the firm鈥檚 latest accounts.

The developer鈥檚 results for the year to 31 March 2025 also revealed a 1.6% increase in the value of the firm鈥檚 properties.

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British Land is redeveloping Canada Water in south London

It recorded 拢454m revenue, down from 拢575m in the year prior. However, this was largely due to a tenancy being ended early in the 2024 period, which resulted in a 拢149m premium being recognised on that year鈥檚 income statement.

Simon Carter, chief executive of British Land, said the results vindicated its 鈥渃ontrarian position鈥� of investing in offices and retail parks in the immediate aftermath of the pandemic.

Over the past five years, he said, British Land had bought 拢1.2bn of retail parks and committed to 3m sq ft of best-in-class campus developments, 鈥渁t a time when there was very little new supply coming into both markets鈥�.

鈥淎s a result we are seeing above inflation rental growth as well as renewed investor demand across both markets, enhancing our conviction in our strategy,鈥� he said.

He said retail parks had been the best performing subsector in UK real estate over the past four years, delivering the firm a total property return of 12.7% per annum.

Meanwhile, he said, the return to office was 鈥渋n full swing鈥�, with Tuesday to Thursday utilisation back at pre-Covid levels.

He said that in the City, there was a 5.3m sq ft shortfall of new or substantially refurbished space to 2029, with unfilled demand for best-in-class space now gravitating to 鈥榞ood鈥� spaces at lower price points.

鈥淭o capitalise on these dynamics, we have committed to upgrading Broadgate Tower. The scheme is expected to complete in late 2026,鈥� he said.

British Land is currently on site with 2.4m sq ft of space, although it said increased interest rates in FY24 had led it to increase the level of return it required for new developments.

Plot A in Canada Water and 1 Broadgate are expected to complete in the second quarter, while 1 Triton Square is set to complete in the third.

Mandela Way, an urban logistics hub in Southwark, is also due to complete in the third quarter, while another hub a mile away at Verney Road is in its near-term pipeline.

2 Finsbury Avenue is expected to complete in the second quarter of 2027.

The rest of its near term pipeline is made up of 1 Appold Street, while its medium term pipeline includes more than 7 million sq m of space in the medium term pipeline, mostly composed of Euston Tower and future phases of the Canada Water Masterplan.

Earlier this year, the developer moved to rejig some of its plans for Canada Water away from office space and towards student accommodation.

The firm鈥檚 total development pipeline of more than 10 million sq m

Carter said he was pleased with the firm鈥檚 performance and said it continued to lease space at rents 鈥渟ignificantly ahead of valuers鈥� expectations鈥�.

Retail park values increased 7.1% and retail and London urban logistics 5%, while campuses were down 0.8%, although values experienced an uptick in the second half of the year and the firm expects high-quality campuses to be a 鈥渒ey driver of earnings growth going forward鈥�.

The firm expects underlying profit growth of 2% in full-year 2026, with 3-6% per annum earnings growth in subsequent years.