British Land pointed to stronger-than-expected earnings and leasing momentum after what it described as an “excellent year” across its office campus and retail park portfolio, upgrading guidance for 2027 as demand from artificial intelligence occupiers accelerates and availability tightens.

The UK REIT said in an update it expected underlying profits to reach £294M, up from £279M the prior year, while portfolio values rose 2.3%. Estimated rental value increased 4.9%, led by campuses at 6.5%.

London office campuses led growth, with 1.7M SF of deals completed at rents 20% above previous passing levels. The company partly owns and manages Broadgate in the City, Paddington in west London and Regent's Place near Euston.

Occupancy increased to 95%, with remaining vacancy concentrated in newly delivered space.

The landlord highlighted growing take-up from AI firms, particularly in the area around King's Cross known as the Knowledge Quarter, where it said leasing at Regent’s Place has outperformed expectations.

At One Triton Square, the building is now 78% let with a further 16% under offer, including all lab space. Recent deals include a 158K SF lease to Anthropic, marking the sixth transaction between the companies.

Retail parks also continued to perform well, with occupancy at 99% and leasing in the second half of the year 6.3% ahead of previous rents. Across the full year, retail and logistics leasing totalled 2.1M SF.

Chief Executive Simon Carter said leasing performance has been driven by constrained supply and resilient occupier demand despite macroeconomic uncertainty.

“This has been an excellent year of leasing, reflecting our market-leading position in campuses and retail parks, where availability for high-quality space in the right locations is near record lows, and occupational fundamentals continue to strengthen, despite ongoing macroeconomic volatility,” Carter said in a statement.

He added that AI and innovation-led occupiers are reshaping demand across its London campuses.

“In campuses, we are seeing accelerating demand from a new wave of AI and innovation-led occupiers, driving strong rental growth in what remains a supply constrained market. Our virtually full retail park portfolio delivered positive leasing against previous passing rents of 6.3% in the second half of the year,” he said.