British Land has heralded strong rental growth in its campus portfolio, driven by a wave of AI and tech firms, in a trading update for Q4 of its 2025 to 2026 financial year, ahead of its full year results next month.
British Land chief executive Simon Carter
The update shows like-for-like rental growth of 6% for the quarter, ahead of 3% to 5% expectations, and underlying earnings per share (EPS) of 28.9p, above the 8.5p set previously.
Rental growth was led by a 12% like-for-like rise for British Land’s campuses. The London campuses attracted particularly strong leasing momentum, with 215 deals covering 1.692m sq ft over the course of the year, accelerated in Q4 by 834,000 sq ft of deals.
The year’s headline deal was Herbert Smith Freehills Kramer signing a 21-year lease at its 1 Appold Street building, setting record rents for the London Broadgate campus.
Chief executive Simon Carter heralded an “excellent year of leasing” and said the results reflected British Land’s “market-leading position in campuses and retail parks“.
He added: “In campuses, we are seeing accelerating demand from a new wave of AI and innovation-led occupiers, driving strong rental growth in what remains a supply constrained market.
“Our virtually full retail park portfolio delivered positive leasing against previous passing rents of 6.3% in the second half of the year. The dynamics in both markets have translated into strong like-for-like rental growth which, combined with development leasing and disciplined cost control, has more than offset higher funding costs.
“This is expected to deliver underlying EPS of 28.9p for [the full year] and, together with stable yields and ERV [estimated rental value] growth, drive an 8.1% total accounting return.”
Regent’s Place, 1 Triton Square
Strong AI and tech take-up has been reflected at British Land’s One Triton Square near King’s Cross, which is now 78% let and 16% under offer, including all of the lab space, exceeding the REIT’s expectations when it launched the scheme in October.
Most recently, Anthropic, the firm behind AI tool Claude, signed for 158,000 sq ft at the development.
British Land has upgraded it financial year 2026-2027 underlying EPS guidance from 30.2p to at least 30.5p, following the £150m acquisition of Life Science REIT, which it completed on 20 April.
Oli Creasey, head of property research at Quilter Cheviot, said: “While it is encouraging to see the company ahead of expectations, the context is key. This time last year the company was guiding to flat earnings year on year, which was a disappointment for shareholders, so growth of 1.4%, while an improvement, remains fairly modest.
“The more important signal is guidance for growth of around 5.5% for the next year ending March 2027, indicating that the company expects earnings growth to accelerate meaningfully. This outlook is largely unchanged, once adjusted for the Life Science REIT acquisition.”
Creasey added: “The pre-release of a net asset value of 590p, up 4% year on year, points to steady valuation growth across the year, with roughly equal contributions from the first and second halves.
The valuation took place at the end of March, after the Iran conflict began, but Creasey said it suggested “that no meaningful adjustment has been made as a result of the rise in interest rates seen since.
“With little reference to external risks in today’s statement, investors are likely to look to the full-year results next month for greater clarity on what impact the conflict will have on valuations.”
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