British Land Company (OTCPK:BRLA.F) Update / Briefing Transcript

Summary of British Land Company Update / Briefing (November 25, 2025) Company Overview - Company: British Land Company (OTCPK:BRLA.F) - Focus: Market-leading position in campuses and retail parks, representing 90% of the business [2][60] Key Industry Insights - Occupational Fundamentals: Strong demand and constrained supply in the office and retail sectors, leading to affordable rents [2][60] - Investment Trends: Increased investor allocations to retail and office sectors due to attractive total return profiles [2][7] - Office Market Dynamics: - Return to office utilization exceeds pre-pandemic levels, with midweek usage above 2019 figures [2] - Active demand for office space is 50% above the long-term average, with a predicted vacancy rate below 2% for new and refurbished spaces [3] - Historical trends indicate potential for double-digit rental growth when vacancy rates are this low [3] Financial Performance Highlights - Underlying Profit: Increased by 8% to GBP 155 million [9] - Earnings Per Share (EPS): Up 1% to GBP 15.40, with a corresponding 1% increase in dividends [10] - Net Asset Value (NTA): Increased by 2% to GBP 579 per share, reflecting a 1.2% rise in property values [12] - Total Accounting Return: Achieved 4% for the half-year, on track for a full-year target of 8-10% [12] Growth Drivers and Earnings Levers - Like-for-Like Rental Growth: Achieved 4% growth, with expectations of 3-5% for the full year [17] - Fee Income: Flat at GBP 13 million in the first half, but projected to grow by 10% for the full year [18] - Cost Control: Admin costs reduced by GBP 5 million (12% decrease) [10] - Development Leasing: Benefiting from schemes like One Broadgate and The Optic, with ongoing leasing activity [19] - Capital Recycling: Focus on disposing of lower-returning assets to reinvest in higher-return opportunities [15] Retail Parks Insights - Market Position: Largest owner and operator of multi-let retail parks in the U.K., with a portfolio accessible to half the U.K. population within a 30-minute drive [5] - Retailer Demand: Strong demand from retailers like M&S, Lidl, and Aldi, with no new supply expected in the next decade [5][6] - Occupancy Cost Ratios: Improved from 17% in 2016 to around 9% today, allowing retailers to operate profitably [55] Future Outlook - EPS Growth Guidance: Expected to be at least GBP 0.285 for FY2026, with at least 6% growth for FY2027 [34][38] - Sustainable Earnings Growth: Projected sustainable EPS growth of 3-6% over the medium term, driven by strong occupational fundamentals [19][60] - Investment Strategy: Continued focus on retail parks and campus developments, with a capital-light approach to reduce risk [15][42] Additional Considerations - Technological Enhancements: Implementation of digital technologies for improved building experiences, such as contactless entry [56] - Sustainability Initiatives: Focus on low-cost interventions to enhance building sustainability, which also improves rental values [58] - Market Adaptation: Observations of changing tenant mixes, with increased demand from tech and AI sectors [46][47] This summary encapsulates the key points from the British Land Company update, highlighting the company's strategic focus, financial performance, and market dynamics.