British Land – on solid ground
Aarin Chiekrie, equity analyst, Hargreaves Lansdown: “British Land had a strong first half, with constructive lettings progress, cost cuts and a solid outlook for next year, showing investors that the direction of travel is positive. London campuses remain a priority, and the group has some prime real estate in the City, which offers well-connected office space. Demand for new space is improving, with the science & technology sector helping to fuel this uplift. It currently accounts for around 20% of British Land’s campuses, but that could rise to 50% by the end of the decade as AI-focussed companies help fuel the sector’s momentum.
Retail parks continue to be a standout performer in terms of both rental growth and capital appreciation. These parks are popular with retailers because they’re affordable, easily accessible, and adaptable, which has led to occupancy rates rising to 99%. British Land’s growing portfolio in this area is well-positioned to benefit from continued demand for out-of-town shopping locations. The balance sheet remains in good shape too, helping to support the prospective 6.3% dividend yield. But with developments back in focus, dividend growth could take a back seat from here.”