British Land's £2bn opportunity

Indeed, British Land spent £128m in the period on an office building in Victoria, a retail park in Sunderland and on upping exposure to its Pillar and Hercules funds. It has current bids out on £500m-worth of property. This is hotly tipped to include the near Glasgow, which is being sold by Lloyds for a reputed £290m. Moreover, a further £2bn of acquisitions are currently being screened - 42 per cent are in retail and 22 per cent are in offices. "We are certainly in discussions with our existing JV [joint venture] partners about extending [those ventures]," said chief executive Chris Grigg, alluding to British Land's history of sale and leaseback deals with supermarkets Tesco and Sainsbury. He also noted that the banks "have a lot of wood to chop", although working those situations through will take time.

At the performances level, an on a like-for-like basis, British Land's commercial property portfolio increased in value in the second quarter - the first rise since June 2007. Granted, the increase was small (1.4 per cent) but it boosted NAV by 3.1 per cent and underpins management confidence that the worst is over. While, following September's , the City office weighting has dropped from 31 per cent to 20 per cent of its portfolio by value. However, development plans aren't on the agenda yet. "It is hard to make the numbers add up," Mr Grigg added. "However our attitude [to development] has gone from 'no' to 'not now' and we'll continue to review that."

The group's net rental income fell 8.2 per cent in the period to £291m - reflecting the impact of disposals. But lease lengths now average 13 years and occupancy levels are high at 94 per cent (98 per cent excluding recent office development completions).

KBC Peel Hunt expects full-year NAV of 471p, rising to 528p in 2011.

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