British Land optimistic after first quarter

The group, which owns half of Sheffield's Meadowhall shopping hall centre, reported underlying profit before tax for quarter one of 64m, 3.2 per cent up on the final quarter of 2009-10.

Net asset value per share rose 2.2 per cent to 515 pence but the rate of portfolio valuation growth slowed "as expected" to 1.4 per cent.

The firm said it had benefitted from further London office leasing actvity, as well as "resilience" in its retail portfolio, to reach occupancy levels of 97.8 per cent.

Office occupancy was up 4 per cent to 96.6 per cent with more than 210,000sq ft of new office lettings agreed or under offer since March

It also said retail occupancy had stayed high at 98.6 per cent with around 765,000 sq ft of retail lettings and rent reviews.

Chris Grigg, chief executive, said: "We have performed well in what has been an important quarter for British Land.

"Reaching agreement with UBS to develop and occupy a new 700,000 sq ft building is a major step in our investment programme to ensure Broadgate remains the City's premier office location.

"In addition, we continued to successfully let recently developed office space with around 800,000 sq ft of prime London office lettings in the last six months and rental levels significantly higher now than a year ago."

Valuations have risen more slowly in this quarter, reflecting in part a more uncertain economic outlook, he added.

"While we remain cautious about the near-term outlook, our prime real estate, underpinned by good tenant credit quality and high occupancy, is expected to perform well and we remain confident about the long-term prospects for the business."