British Land swings to profit as rent collection improves

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Office property firms in the UK are gradually recovering after battling lower rental levels and steep decline in valuation in the wake of the pandemic, as people increasingly return to cities, while more spacious retail parks have benefited during the health crisis.

“Demand is firmly focused on the very best (office) space, with an emphasis on sustainability, wellness, shared and flexible space and excellent transport connections,” Chief Executive Officer Simon Carter said in a statement.

The Broadgate Estate owner, which counts office space as its biggest segment, said a per-share measure that reflects the value of its buildings, EPRA Net Tangible Assets, rose 5.1% to 681 pence, while overall portfolio valuation increased 2.9%.

The company said rent collection at its retail portfolio was 96% for the half-year period, while it was entirely collected for the office spaces.

The FTSE 100 firm said profit after tax came in at 370 million pounds ($497.95 million) for the six months ended Sept. 30, from a loss of 730 million pounds a year earlier.

British Land’s bigger rival Landsec also swung to a half-year profit on Tuesday, helped by “resilient” rents at its prime Central London-focused office portfolio.

($1 = 0.7431 pounds)