British Land, one of the largest property trusts in the UK, has had its portfolio value dwindle in the past six months as the economic downturn weighs on real estate.
The London-listed group reported underlying profit growth of more than 13 per cent to £136m.
However, its portfolio value sank three per cent, dragged by declines in retail and fulfilment spaces, as rising interest rates bite.
“Higher interest rates have increased property yields, but the impact on valuations was partially cushioned by rental growth,” CEO Simon Carter said in a statement.
“In campuses, demand remains robust for best-in-class workspace. retail parks continue to benefit from retailers’ focus on omni-channel and affordability, while the fundamentals in urban logistics remain compelling given the acute lack of supply and the transport savings operators can realise from the best London locations.”
The property boss remained hopeful for what the next six months has in store for British real estate.
“We go into the second half with a strong leasing pipeline, but mindful of the weaker macro environment in which we are operating,” he said.
“Well-timed disposals strengthened our balance sheet and combined with the quality of our platform and our continued commitment to capital recycling, mean we are well placed to exploit our attractive development pipeline and the opportunities now emerging in the market.”