This article first appeared on GuruFocus .
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Like-for-Like Net Rents Growth:6%, adding 2.1p to EPS.
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Campus Growth:12% as EPRA occupancy improved.
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Retail Growth:2% despite high occupancy levels.
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Development Leasing Contribution:Added 1.4p to EPS.
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Admin Costs Reduction:Down 9%, adding 0.8p to EPS.
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Higher Finance Costs Impact:Reduced EPS by 3.4p.
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Underlying Profit Increase:Up 5%.
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Underlying EPS Increase:Up 1%.
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Final Dividend:10.8p, total payout 23.12p, up 1%.
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Portfolio Values Increase:2.3% over the year.
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NTA Per Share Increase:4% to 590p.
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Total Accounting Return:8.1%.
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Leverage Metrics:LTV at 39.2%, net debt-to-EBITDA at 7.7 times.
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Liquidity:1.6 billion pounds.
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EPS Growth Expectation for FY '27:At least 30.5p, 6% growth from FY '26 levels.
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Retail Parks Occupancy:99% with 4.4% rental growth last year.
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Record Leasing:143 million pounds of leasing last year.
Release Date: May 20, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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British Land Co PLC ( BRLAF ) reported strong earnings growth, with underlying profit up 5% and underlying EPS up 1%, driven by like-for-like net rents growth of 6%.
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The company achieved a record 143 million in leasing last year, representing 15% of the London office market's reported leasing and 33% in the fourth quarter.
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British Land Co PLC ( BRLAF ) has a strong market position in campuses and retail parks, which now represent 90% of its business, with high occupancy rates and strong demand.
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The acquisition of Life Science REIT is immediately earnings accretive and adds high-quality assets to the portfolio, particularly in the science and tech sector.
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The company has a robust balance sheet with a 4% increase in NTA per share and a total accounting return of 8.1%, supported by strategic asset management and cost control.
Negative Points
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Higher finance costs reduced EPS by 3.4p, primarily due to increased interest rates and the capitalization of interest on developments now hitting the P&L.
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The development environment is challenging due to higher build and funding costs, which may impact future projects.
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There is uncertainty regarding the impact of geopolitical tensions and inflation on future rental growth and tenant health.
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The company's net rent margin and cost ratio have been impacted by increased void costs and provision movements, with a current cost ratio of 17.5%.
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Concerns were raised about the risk associated with tenants who are not profitable, particularly in the science and tech sectors, which may pose a higher credit risk.
Q & A Highlights
Q: How does British Land manage the risk associated with tenants who are not profitable, such as SMEs and companies like Anthropic? A: Simon Carter, CEO, explained that for smaller tenants, the focus is on the ability to quickly move tenants in and out of spaces. For larger HQ spaces, British Land requires strong credit profiles. Although Anthropic is currently loss-making, its high valuation makes it a covenant they are comfortable with.
Q: What is the margin on the new commercial paper program, and what is its total capacity? A: David Walker, CFO, stated that the commercial paper program is back-to-back with revolving credit facilities (RCFs) and currently stands at around 350 million, with expectations to increase to 400 million. The program offers a 50 basis point plus margin differential compared to RCFs, providing a P&L benefit.
Q: Can you explain the changes in yield on costs and ERV for certain development assets? A: Simon Carter, CEO, noted that for One Triton Square, the shift from fitted labs to primarily office space affected the yield on cost. At Canada Water, delays due to building safety regulations impacted the yield on cost. The ERV adjustments reflect market conditions and leasing progress.
Q: How is British Land addressing potential impacts of UK government price caps on retailers with thin margins? A: Simon Carter, CEO, mentioned that retail parks have strong demand, with retailers moving from high streets to parks due to efficiency. The occupancy cost ratio of 9% on parks is attractive, and while price caps could pressure margins, the demand for park space is expected to remain strong.
Q: What are the updates on the Canada Water project, particularly regarding affordable housing requirements? A: Simon Carter, CEO, shared that the affordable housing requirement at Canada Water has been reduced from 35% to 9% under a Section 73 application. This change allows for more flexibility in future plots and supports a capital-light strategy for the project.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
