British Land’s FY26: 6% rental growth, EPS beat, and an FY27 upgrade
British Land’s latest trading update is a tidy blend of execution and momentum. Like-for-like net rental growth came in at 6% for FY26, ahead of guidance, with campuses doing the heavy lifting at 12%. Underlying EPS is expected to be 28.9p, also ahead of guidance, and the company has nudged up FY27 EPS guidance to at least 30.5p.
The tone is confident: vacancies are down, leasing velocity is up, and yields look stable. Add the completed acquisition of Life Science REIT and you’ve got a clearer growth runway into FY27 and beyond.
Key numbers investors should note
| Metric | FY26 (unless stated) |
|---|---|
| Underlying Profit | £294m (FY25: £279m) |
| Underlying EPS | 28.9p (FY25: 28.5p) |
| Like-for-like net rental growth | +6% (Campuses +12%; Retail parks +2%) |
| Portfolio valuation movement | +2.3% (Campuses +2.0%; Retail parks +3.3%) |
| ERV growth (Estimated Rental Value) | +4.9% (Campuses +6.5%; Retail parks +4.4%) |
| NEY (Net Equivalent Yield) | 6.0% (down 4 bps) |
| EPRA NTA per share | 590p (FY25: 567p) |
| Total Accounting Return (TAR) | 8.1% |
| Leasing signed | 3.8m sq ft, 7.2% ahead of ERV |
| Leasing under offer | 1.1m sq ft, 12.9% ahead of ERV |
| Loan to value (LTV) | 39.2% (FY25: 38.1%) |
| Group Net Debt to EBITDA | c.7.7x (FY25: 8.0x) |
| FY27 Underlying EPS guidance | At least 30.5p (previously 30.2p) |
Campuses: AI and innovation demand powering 12% rental growth
This is the star of the show. British Land signed 1.7m sq ft of campus leasing, 6.3% ahead of ERV and a striking 20.0% ahead of previous passing rent (the rent currently being paid). Occupancy is now 95% (91% on an EPRA basis), up from 92% in September, with the remaining vacancy skewed to newly delivered, best-in-class space – exactly where demand is strongest.
Leasing accelerated sharply in Q4 with 834,000 sq ft of deals, including Herbert Smith Freehills Kramer at 1 Appold Street, which set record rents at Broadgate. At Regent’s Place, One Triton Square is now 78% let and 16% under offer, including all lab space. British Land signed Anthropic for 158,000 sq ft – the sixth deal with the company – highlighting how the campus model can support fast-scaling AI tenants in the Knowledge Quarter.
Why it matters: supply is tight, demand is rising, and rents are moving up. That combination is feeding straight into earnings and asset values, with ERV growth of 6.5% and campus values up 2.0% for the year.
Retail parks: 99% full and still edging rents higher
The retail park portfolio remains “virtually full” at 99% occupancy (96% EPRA). Leasing hit 2.1m sq ft, at 8.4% ahead of ERV and 1.2% ahead of previous passing rent, with second-half deals 5.2% ahead of previous passing. A further 838,000 sq ft is under offer, 10.3% ahead of ERV.
Like-for-like net rental growth was 2%, reflecting both the benefits of near-full occupancy and the final burn-off of overrents. The key point: retailers continue to favour the retail park format for click-and-collect, convenient access and lower occupancy costs, which provides resilience on occupancy and pricing power.
Valuation, yields and NTA: signs of stabilisation
Portfolio values rose 2.3% over the year, with NEY at 6.0% (down 4 basis points). ERVs grew 4.9%. That backdrop, plus earnings, delivered an 8.1% Total Accounting Return and lifted EPRA NTA to 590p from 567p.
In a market where finance costs have been a headwind, this matters. British Land says rental growth, development leasing and cost control have more than offset higher funding costs this year, and stable yields have helped. If yields hold and ERVs keep rising, NTA should remain underpinned.
Balance sheet: modestly higher LTV, improving leverage metrics
LTV ticked up to 39.2% (from 38.1%), while Group Net Debt to EBITDA improved to around 7.7x (from 8.0x). The slight rise in LTV likely reflects transaction and capex timing, while the EBITDA leverage trend is moving the right way as income grows.
My take: gearing is on the higher side for a diversified REIT, which adds sensitivity to valuation moves. But strong leasing, rising ERVs and stable yields reduce the near-term risk, provided rates don’t lurch higher again.
Life Science REIT acquisition: small EPS boost now, more to come
The acquisition of Life Science REIT completed on 20 April 2026. Management expects around 1% EPS accretion in FY27, with further upside from leasing newly delivered space and capturing reversion (the gap between current passing rent and ERV).
Strategically, this deepens British Land’s exposure to the same innovation-led demand it is already seeing at Regent’s Place. It is not transformational on day one, but it nudges earnings up and enhances the development and leasing pipeline in a high-growth niche.
Guidance and outlook: upgraded EPS and confident ERV trajectory
FY26 delivered ahead of guidance, and British Land has upgraded FY27 Underlying EPS guidance to at least 30.5p. The company also reiterates medium-term EPS growth of 3-6% per year and ERV growth of 3-5% per year across the portfolio.
Also worth noting: 1.1m sq ft is already under offer at 12.9% ahead of ERV. That should support rental growth and near-term earnings as deals complete, especially with Q4 showing particularly strong activity.
Jargon buster
- Like-for-like net rental growth: rental growth on properties held throughout the period, excluding acquisitions/disposals and developments.
- ERV (Estimated Rental Value): the rent a property could achieve in today’s market.
- NEY (Net Equivalent Yield): a valuation yield that reflects current and future rental income; falling NEY can indicate firmer valuations.
- EPRA NTA: a property industry metric for net tangible assets per share.
- Total Accounting Return (TAR): change in NTA plus distributions over the period.
- Passing rent: the rent currently being paid under existing leases.
- Reversion: the uplift potential between passing rent and ERV.
Risks and watch-outs
- Macro and rates: management flags ongoing macro volatility. Higher-for-longer rates would keep funding costs elevated.
- Gearing: LTV at 39.2% means sensitivity to valuation movements; stable yields are supportive, but this is one to monitor.
- Leasing delivery: EPRA occupancies (91% campuses, 96% retail) show there is still space to fill, particularly in newly delivered assets. Momentum looks strong, but execution remains key.
- Retail normalisation: retail park growth was 2% like-for-like, partly reflecting the final overrent burn-off. Further rent progression will rely on continued tenant demand and limited new supply.
Bottom line: a confident step-up into FY27
This is a clean, upbeat update. British Land is benefitting from powerful leasing in campuses and rock-solid occupancy in retail parks. ERVs are rising, yields look steady, and earnings beat guidance despite higher funding costs – a good combination.
FY27 EPS guidance is raised to at least 30.5p, with an extra nudge from the Life Science REIT deal. Dividends are not disclosed in this update. The next catalyst is the preliminary results on 20 May 2026, where we should get fuller detail on cash flow, funding, and the early contribution from the new life sciences assets.
