British Land upbeat as its rents climb

BRITISH Land yesterday reported a profit rise but its shares were dented after some analysts went lukewarm on the stock.

The company reported a 12.5 per cent rise in net asset value (NAV) to 567p and a 2.8 per cent increase in underlying profit to £256m.

But its shares were hit as some brokers downgraded its stock, with Peel Hunt relegating it from “buy” to “hold”.

British Land said the company was benefiting from higher rents, particlarly from premium central London office space. It is spending £1.1bn to build 2.2m sq ft of office properties in central London by 2014. The projects include the Leadenhall Building, known as the Cheesegrater.

Chief executive Chris Grigg said: “We are optimistic ... 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.”

British Land retained its full-year dividend of 6.5p, meaning its total dividend for the year was stable at 26p.

Its shares closed 2.8 per cent lower at 576p yesterday.

Last week Land Securities said it would develop more prime central London offices to capitalise on a wider than expected supply shortfall, after reporting a 19.5 per cent rise in its full-year NAV to 826p a share.