Barclays raised its stance on British Land on Tuesday, moving the stock from an equal weight rating to overweight and increasing the price target to 465 pence from 450 pence. That new target sits against a May 21 closing price of 388 pence and implies roughly 20% upside, according to the note.
The broker values British Land at about 12.5 times fiscal year 2027 estimated earnings, which equates to an approximate 8% EPS yield, based on Barclays' calculations.
Changes to earnings expectations
Barclays lifted its five-year EPS compound annual growth rate (CAGR) estimate for British Land to 4.5% from 3.7%. Its modelling shows recurring EPS progressing from 29 pence in fiscal year 2026 to 31.1 pence in fiscal year 2027, 32.7 pence in fiscal year 2028 and 34.1 pence in fiscal year 2029.
Barclays noted management guidance of at least 6% earnings growth in fiscal year 2027 and a medium-term objective of 3% to 6% per annum. The analysts added: "This is not an NAV story; it is an income and income-growth story."
Landsec reassessed alongside British Land
At the same time, Barclays reiterated an overweight rating on Landsec and nudged its target up to 780 pence from 770 pence. That target compares with a close of 618 pence, implying about 26% upside.
Barclays calculates Landsec trades at roughly 12 times fiscal year 2027 earnings, or an 8.3% EPS yield. The brokerage's model has Landsec's EPS reaching 62.1 pence by fiscal year 2030, which Barclays says is in line with management's roughly 62 pence target.
Quality of the current earnings cycle
Barclays characterised the present earnings cycle as higher quality than the previous cycle. The note highlights that, between fiscal year 2014 and fiscal year 2019, £97 million of Landsec's £127 million recurring earnings increase came from lower finance costs. A similar dynamic contributed to British Land's earnings progression in the prior period: £50 million of its £93 million rise from fiscal year 2015 to fiscal year 2018 was attributable to the same tailwind.
What Barclays now expects
For British Land, Barclays now forecasts £81 million of earnings growth from fiscal year 2026 to fiscal year 2031, which the broker says will be driven by £189 million of gross rental income growth and partly offset by £114 million of higher finance expenses.
Operational and portfolio metrics
British Land's campus portfolio secured headline rent totaling £143 million and completed 1.7 million square feet of deals in fiscal year 2026. The portfolio reported like-for-like net rental growth of 12% and occupancy of around 95%.
Landsec's office assets delivered 6% like-for-like income growth, with occupancy at a decade-high level of 98.6%.
On the retail side, British Land's parks were 99.1% occupied, with leases signed on terms 9% ahead of estimated rental value (ERV). Landsec signed £36 million of rent at about 10% above ERV across 250 lettings, up 24% year-on-year.
Balance sheet outlook
British Land finished fiscal year 2026 with net debt to EBITDA at 9.2 times. Barclays forecasts this ratio will fall to 7.3 times. For Landsec, Barclays' calculation puts net debt to EBITDA at 8.7 times, which the broker expects to decline to 6.9 times by fiscal year 2029.
This note contains Barclays' ratings, price targets, earnings forecasts and portfolio metrics as described above. The brokerage's assessments reflect its updated modelling and management guidance referenced in the firm's note.