PROPERTY owner British Land reported a slight fall in the value of its portfolio yesterday as higher interest rates dragged on demand for commerical property.

However the owner of London's Broadgate and Regent's Place said that there continued to be a "gravitational pull towards modern, high quality and sustainable space" as underlying profit growth shot up 13 per cent year on year to £136m.

"Higher interest rates have increased property yields, but the impact on valuations was partially cushioned by rental growth," CEO Simon Carter (right) said in a statement.

The firm said that it expected new, competing developments in London to be put on ice due to "economic un- certainty" and said that it would likely benefit from higher rates on its remaining space in its London sites.

The last half-year saw renewals to firms including Meta and further leasing at the Regent's Place life sciences hub.

The property boss remained hopeful for what the next six months has in store for British real estate.

"We go into the second half with a strong leasing pipeline, but mindful of the weaker macro environment in which we are operating," he said.

On Tuesday, rival Landsec also revealed the wounds that rising interest rates had left, with the company having booked a nearly £200m loss over the past six months.

British Land's shares fell just more than 2 per cent yesterday on the half-year results.

(c) 2022 City A.M., source Newspaper