British Land Company Plc (BLND) Q2 2024 Earnings Call

Investor webinar replay

Replay transcript excerpt

Good morning everyone and thank you very much for joining us for our half year results. Well done for battling in against Storm Debbie. We appreciate you coming today. We'll follow the usual running order. Bhavesh will take you through the financials, Darren the operational performance and I'll wrap up on the strategy and the outlook. But before we do that, I just wanted to share the headlines. We're really pleased with the operational performance in this half. We've continued to lease well right across the business with 1.6 million square feet of leasing 12% ahead of ERV. We've also controlled costs well despite inflation and taken together this has led to profit growth of 3%. The macroeconomic and geopolitical backdrop remains uncertain as we know and interest rates have increased since we last reported. As a result, we've seen further outward yield shift of 23 basis points, though this slowed during the period. Importantly, rental growth has accelerated with ERV up more than 3% across all three of our sub markets. This has cushioned the impact on portfolio values, which were down 2.5%. In the near term, movements in interest rates, both up and down, will continue to affect property values, but rental growth is likely to be the dominant driver of medium-term performance. We're now expecting this to be at the top end of our guidance range for each sub-market. And as a reminder, that's 2-4% for campuses. 3-5% for retail parks and 4-5% for London urban logistics. Combined with a net equivalent yield of more than 6% and development upside, that makes for an attractive future return profile. A key theme today is the importance of being in the right sub-markets as bifurcation accelerates. The best parts of London are thriving. Take here at Broadgate, for example. We're a...