British Land bettered its larger rival Land Securities in interim results this week, delivering a 4.5% rise in NAV to 623p a share.
This compared with 3.8% growth to 937p a share by the UK’s largest REIT, LandSec.
BL, led by Chris Grigg, posted an 8.9% rise in the value of its development pipeline, plus a 2.1% increase in its standing investments. This resulted in a 2.8% increase in the value of the firm’s portfolio to £11.2bn.
BL’s investment portfolio was boosted by 5% growth in its West End assets, which now account for 59% of its London holdings.
LandSec’s development pipeline rose in value by 5.4%, and although its City offices performed better than BL’s with 5% growth, its total portfolio uplift was a shallower 1.9%.
British Land said it had made development profits of £400m from its 2010 development programme and expected a further £90m profit in the second half.
Looking ahead, BL said its 2.1m sq ft of “recently committed and near-term” developments should drive a further £275m profit on costs of £1.1bn.
This pipeline includes its holdings at Paddington Central, W2, where a review of the 355,000 sq ft of consented office space at 4 and 5 Kingdom Street could see part of the 1.2m sq ft campus given over to residential.
Finance director Lucinda Bell said: “We are looking at a greater variety of uses and occupiers on the site, which could include residential. It is under consideration at the moment.”
She added that the developer is planning to replicate the rental growth at Regent’s Place, NW1, where office tenants now pay £70 per sq ft, up from £42.50 per sq ft in 2010.
It has already agreed a 20,000 sq ft letting to international IT firm Kaspersky Lab, on the first floor at 2 Kingdom Street adding to BL’s £21m annual rental income from Paddington.
