British Land (BLND) kicks off the real estate reporting season with full-year figures on Thursday, and given the robust health of the property sector, it is expected to deliver a strong improvement in net asset value.
The group is reaping the rewards of its decision in 2010 to develop 2.7m sq ft of residential and office space, mainly in London. London offices continue to deliver the strongest capital performance, but as the development arm matures, rising rental income is likely to take over from yield compression as the main driver of capital value. As yet, there are few concrete indications that the renaissance in property values is reaching a peak. But it makes sense to shift de-risking up the agenda because the current cycle will end at some point. It will also be worth noting how much further the group has reduced its exposure to the underperforming superstore sector. Analysts at Numis Securities are looking for net asset value at the year-end of 834p, rising to 933p in 2016 (from 688p in 2014).
