British Land profit slumps but sees recovery signs

British Land's annual profit fell by more than one-third and the value of its properties dropped by more than 10% as the Covid-19 crisis took its toll on the commercial landlord.

Underlying profit for the year to the end of March dropped 34.3% to £201m as British Land made provisions for non-payment of rent. British Land said it collected 83% of rent due for the year comprising 99% of office rent and 71% of retail

The value of the FTSE 100 group's portfolio fell 10.8% to £9.13bn. British Land's annual dividend fell to 15.04p a share from 15.9p in line with its policy of paying out 80% of underlying earnings.

The owner of London's Broadgate office complex and Meadowhall shopping centre in Sheffield said trading was encouraging since non-essential shops were allowed to reopen with footfall up 88% and sales up 104% at its retail sites.

British Land is selling unwanted assets, moving into warehouse property and building environment-friendly offices to respond to changing demand for property. The company said it expected office rents to fall by 5% before recovering but that its sites would outperform the wider market.

"Although it is early days, economic indicators are positive, and we are hopeful that we are starting to emerge from the pandemic," British Land said. "However, we are very mindful that the trajectory for this pandemic is highly uncertain with risk from future variants, so we take comfort from the strength of the balance sheet and our resilient performance over the last 12 months."

British Land said it had £1.8bn of undrawn bank facilities and cash with no requirement to refinance until early 2025.