Wednesday 20 May 2026 10:10 am
People are moving towards more days in the office, British Land says
British Land has declared the debate over returning to the office “over,” as it prepares to capitalise on constrained supply and a “wave of demand” for commercial property from AI firms. The FTSE 100 property developer saw its profit before tax jump by 32 per cent to £450m in the year to March, as the value of its portfolio grew by two per cent to £10bn. Chief executive Simon Carter said: “Across London the return to the office debate is over and occupiers continue to expand. “There is a new wave of demand from high growth AI and innovation-led businesses for whom our campus offering particularly resonates.”British Land said it expects inflation to rise in the near term and so is returning to the strategy it adopted following Russia’s invasion of Ukraine, investing in “well-located, high-quality assets in supply-constrained markets”. “While the geopolitical and interest rate backdrop has become more uncertain, the occupational fundamentals underpinning our portfolio are as strong as I have seen them,” Carter said.‘People are moving to more days in’Last week, the UK’s largest property developer – FTSE 100 listed Landsec – said its decision to halt new investment in offices is paying off. Though the landowner said “heavy constraints on new supply” are pushing up rents, it opted to pile future investment into its “conviction call” to retail property.But British Land said an overwhelming return to the office following the Covid-19 pandemic means commercial property remains attractive. British Land’s 2 Finsbury Avenue is set to be completed in 2027“We think the right product in the right place is absolutely a way for us to drive returns,” chief financial officer David Walker told City AM.“When we speak to our customers, the office occupiers, they have all got well-established expectations and policies about what they’re expecting from people in terms of days in the office. “People are moving towards more days in, not less, that’s certainly for sure,” he added.Retail parks ‘best performing’ sectorBritish Land expected to see up to five per cent rental value growth in the past year and notched 4.9 per cent.Occupancy in the offices owned by the company was at 95 per cent at the end of March, exceeding the 91 per cent average across members of the European Public Real Estate Association. British Land is also pushing investment into retail property, and has seen its portfolio return 12 per cent per year since it expanded in 2021. The firm’s retail parks are “virtually full” at 99 per cent occupancy, and Walker said these are the “best performing” part of this sector. “They’re very simple assets, they’re car parks and steel boxes effectively, and so we can cut and carve those units [to] deliver the space that our retailers want and need,” he said.British Land’s share price slipped by two per cent on Wednesday’s market open, to 377p, leaving the stock down more than five per cent in the year to date.
