According to the REIT, rents for central London office space have increased for the last three quarters.
Off the back of this, British Land’s net asset value per share has risen by 12.5 per cent to 567 pence.
Chris Grigg, Chief Executive of British Land, said: “We are invested in the right sectors – that is high-quality retail and central London offices.
“We see signs now of rising rents in both of our sectors. That’s both important, a change, and somewhat different from what many others in the industry are seeing.”
The company also reported a rise in underlying profit of 2.8 per cent up to GBP 256 million.
Chris Gibson-Smith, Chairman of British Land, said: “At British Land, we are facing the future with confidence. Our office portfolio comprises modern, flexible buildings that meet evolving occupier needs and we own some of the best retail assets in the UK, where consumers want to shop and retailers trade efficiently and profitably.”
He added that despite the climate of austerity in the UK consumers “are still shopping” and that the company has been “well served by the quality, location and sustainability of its porfolio”.
However, despite British Land’s encouraging performance over the year, several brokers have changed their recommendations from ‘buy’ to ‘hold’ on the REIT.
Meanwhile, rival REIT Derwent London has released its Interim Management Statement for the first quarter of this year, in which it reported an increase in portfolio opportunities and strong performance of its London properties.
John Burns, Chief Executive Officer of Derwent London, said: “The central London office market continues to perform strongly. We have made excellent progress on lettings, especially at the Angel Building, and we are advancing projects in the development pipeline.
Editor’s notes: In 2022, office space rental values in London’s West End reached £130 per square foot reflecting a 10.6 per cent increase over the course of the year.
In 2022, prime office rents remained stable at £72.50 however there were increases witnessed in City submarkets including Clerkenwell, City Northern and City Western.
Prime office rents also remained stable in East London at £44 per square foot per year.
The cited reason for the increases in rental values across Central London was the relative shortage of high-quality of space coupled with increased demand for best-in-class office space that meets ESG aspirations.
In 2023, British Land reported underlying profits of £264 million representing a 6.8 per cent increase on the previous year’s figure of £247 million.
On June 21st 2023, British Land’s share price stood at 327 pence.
As well as leased office space, and other forms of commercial property, British Land offers a range of flexible workspace solutions through its flex space brand Storey that include plug-and-play serviced offices, desk spaces in coworking offices and hireable meeting rooms.