British Land Warns On Geopolitical Risk But Says London Office Leasing Will Hold Up

British offices are full again, at least according to British Land CEO Simon Carter, as the REIT declared the long-running debate over the impact of working from home effectively finished.

It reported another year of strong demand across its London campuses and retail parks, with technology and artificial intelligence occupiers driving a fresh leasing wave. 

Underlying profit for the year to March came in at £294M, slightly ahead of analyst expectations of £291M, as occupancy levels tightened and rental growth accelerated at flagship office schemes, including Broadgate and Regent’s Place. 

“The return-to-office debate is over,” Carter said, pointing to leasing demand that he described as the strongest in years, with central London office takeup now sitting at a two-decade high.

AI firms and global tech occupiers have been leading the charge for premium workspace, with companies including Anthropic, OpenAI, Meta and Gilead all linked to recent market activity in London. 

British Land said leasing activity across its campuses reached a 10-year high during the year, while retail park occupancy — an asset class that British Land has focused on — hit 99%, underscoring how some retail locations continue to outperform despite wider economic uncertainty. 

However, analysts on British Land’s earnings calls focused heavily on whether the momentum behind prime London offices can survive mounting geopolitical and macroeconomic risks, particularly after renewed instability in the Middle East continues to periodically rattle the markets. 

Carter acknowledged that volatility linked to the U.S.-Israeli conflict with Iran could weigh on investment decisions, although he maintained that the structural supply shortage of high-quality offices in London continued to underpin rental growth. 

British Land reiterated guidance for rental value growth of 3% to 5% in the company's financial year 2027, with performance likely to land toward the upper end of that range as demand for modern, sustainability-led workspace continues to outstrip supply. 

The company’s comments add to a growing consensus among major UK landlords that occupiers are consolidating into best-in-class space rather than shrinking footprints altogether. Land Securities has identified similar trends, with trophy offices in core London locations continuing to attract blue-chip tenants despite uncertainty around the economy. 

The mix of strong results but an uncertain geopolitical backdrop meant that shares in British Land had only ticked up around 1% in trading following the results and remain down about 7% over the past 12 months.