British Land Co., the U.K.’s second-largest real estate investment trust, said the value of its properties gained 6.7 percent in the 12 months through March as rising rents trumped the effect of a tax increase on commercial properties.
The value of its assets rose to 14.6 billion pounds ($21 billion), the London-based company said in a statement on Monday. Full-year profit dropped 21 percent to 1.35 billion pounds from a year earlier. Chancellor George Osborne increased the stamp-duty sales tax on commercial property by 1 percent in March.
British Land has reduced the volume of space it’s developing in the last 12 months as value gains slow in London and rents rise less sharply. Total return from investment properties, which combines changes in real estate values and rental income, in the U.K. capital was 1.54 percent in the three months through March, the lowest since 2009, according to data compiled by MSCI Inc.
“We are focusing the business around long-term trends and continue to see the benefits of the investments we have made in recent years,” Chief Executive Officer Chris Grigg said in the statement.
Investment in central London office buildings dropped by 52 percent by value in the first quarter, according to broker Lambeth Smith Hampton Ltd., amid concerns that a U.K. vote to leave the European Union would reduce demand for office space. The referendum will take place on June 23.
British Land’s shares have fallen about 8 percent this year.