British Land Company PLC

FY26 underlying profit increased 5% and underlying EPS increased 1%. Like-for-like net rents grew 6%, with Campus like-for-like growth at 12% and Retail growth at 2%; development leasing added 1.4p to EPS, admin costs were down 9%, and fee income rose by GBP 1 million, adding 0.8p to EPS. Higher finance costs reduced EPS by 3.4p, including a 30 basis point increase in the weighted average interest rate to 3.9%, and there was also a negative year-on-year move in one-off items. Portfolio values increased 2.3%, NTA per share rose 4% to 590p, and total accounting return was 8.1%. The final dividend was 10.8p, taking the total payout to 23.12p, up 1%. For the balance sheet, LTV was 39.2%, net debt-to-EBITDA was 7.7x, liquidity was GBP 1.6 billion, and there is no refinancing requirement until 2029. Looking ahead, management guided FY27 like-for-like growth to the top end of 3% to 5%, cost ratio to around 17.5%, finance costs to rise by 10 to 20 basis points, and EPS to be at least 30.5p. ERV growth was guided at 3% to 5%, and Life Science REIT is expected to add 0.3p to FY27 EPS.

Simon Geoffrey Carter framed the quarter as evidence that British Land’s portfolio is in the right sectors and locations, with supply-constrained markets and strong demand driving pricing power. He repeatedly emphasized active asset management, saying the company is “sweating the assets” through leasing, repositioning, and selective development, especially across Campuses and Retail Parks. His tone was confident but measured, acknowledging macro volatility while arguing the occupational backdrop is strong enough to support outperformance.

David Walker highlighted FY26 earnings ahead of his opening guidance, driven by 6% like-for-like rent growth, 1.4p from development leasing, and a 9% reduction in admin costs. He explained that EPS was held back by higher finance costs, including the 3.9% weighted average interest rate and the shift of previously capitalized interest onto the P&L as developments completed. On capital and liquidity, he cited GBP 3 billion of financing activity, GBP 1.6 billion of liquidity, LTV of 39.2%, net debt-to-EBITDA of 7.7x, and no refinancing needs until 2029. He also said FY27 cost ratio should be around 17.5% before improving further, with margins returning toward 90% over time.

Analysts focused on tenant credit risk in science and tech, development economics, margin pressure, West End valuation softness, and whether rising ERVs could later lead to yield pressure. Management said smaller science and tech tenants are typically on short leases with deposits and fast reletting potential, while HQ tenants require stronger credit and cases like Anthropic were accepted because of growth and scale. On margins, David Walker said the year-on-year drag came from normalized provisions and void costs tied to development timing, but those effects should ease as lease-up flows through. They also said the Life Science REIT deal cost GBP 10 million including the break fee, and that further strategically aligned deals in science and tech would be considered rather than treating the acquisition as a one-off.