Fresh from this week’s disposal of its half-share in Meadowhall Shopping Centre, British Land said its strategy to focus on retail parks, campuses and London urban logistics delivered positive results in H2. 

And there was news that property values remained stable across the six month-period.

“Having achieved much this year”, the commercial property group said it has now reshaped its portfolio so 93% is concentrated in its three chosen markets.

This move helped ERV (estimated rental value ) to grow 5.9% in the second half, “exceeding our guidance in all sectors,” said CEO Simon Carter in its trading update on Wednesday. 

He added: “We outperformed the [financial performance] MSCI benchmark by 300 basis points and values were stable in the second half. Our operational momentum continues with high occupancy, strong leasing and good cost discipline.”

Although full-year net rental income fell 1.3% to £440 million, that was driven by disposals and some asset refurbishments. However, higher fee income and lower costs helped underlying profit rise 2% to £268 million, while its EPRA (European Public Real Estate Association) cost ratio was reduced to 16.4% from 19.5% in FY23.

It said overall portfolio occupancy now stands at 97% with Retail Parks standing at an impressive 99%. Retail & London Urban Logistics leasing stood at 2.6 million sq ft, 17.8% ahead of ERV, and 493,000 sq ft under offer, 17.9% ahead of ERV.

Carter added: “Although the geopolitical and economic landscape remains uncertain, with a portfolio net equivalent yield over 6%, 3-5% forecast rental growth and development upside, we expect to generate attractive future returns.”