RNS Number:4983S
British Land Co PLC
26 November 2003


PART 1 OF 2

                                                                26 November 2003



                          PRELIMINARY ANNOUNCEMENT BY
                          THE BRITISH LAND COMPANY PLC


          INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2003


*   Profit before tax up 33.4% to #87.1 million (2002: #65.3 million)
    Underlying profit before tax up 4.8% to #65.2 million, before gains on asset
    disposals (2002: #62.2 million)

*   Net rents increased to #251.0 million (2002: #249.2 million)

*   Earnings per share up 47.6% to 15.5 pence* (2002: 10.5 pence) on an 
    adjusted and diluted basis

*   Interim dividend up 8% to 4.43 pence (2002: 4.1 pence) per share, 
    maintaining 22 years of consistent dividend growth

*   Net asset value per share increased 1.2% to 870 pence* on an adjusted and 
    diluted basis (March 2003: 860 pence).  Adjusted undiluted net assets per 
    share 895 pence* (March 2003: 884 pence)

*   Gains on property sales achieved 11% above March 2003 valuation

Acquisition of BL Universal: on 17 November, British Land purchased for #120
million the 50% share of the BL Universal PLC joint venture owned by GUS plc.
The price was based on the independent valuation of the entire portfolio of #761
million, principally retail investments, and the assumption of liabilities.


Progress Report - New Chief Executive Appointment

Dr. Chris Gibson-Smith, Chairman of the Nomination Committee of British Land
reports that, with the help of executive search consultants Whitehead Mann, the
Committee has made good progress in its search to identify a new Chief Executive
for the Company. An appointment is expected, as scheduled, not later than the
2004 Annual General Meeting.

*  adjusted to exclude the capital allowance effects of FRS19 and to include, in
calculating NAV, the external valuation surplus on development and trading
properties (Notes 6 and 15)


All figures include British Land's share of joint ventures unless stated
otherwise.



CONTACTS

The British Land Company PLC
John Ritblat, Chairman                        ) 020 7467 2831/2829
Graham Roberts, Finance Director              ) 020 7467 2948


Finsbury Limited
Edward Orlebar                        ) 020 7251 3801
Faeth Birch                           )



                    STATEMENT BY THE CHAIRMAN, JOHN RITBLAT

Finance was a key factor of the half year ended 30 September 2003, as we raised
over #670 million before interest rates moved.

Profits were up 33% at #87 million for the six months.  Property sales showed an
11% uplift from the recent 31 March 2003 valuation, bringing increased capital
profits of #15.9 million and trading profits of #6 million.

Earnings per share, adjusted diluted, were up 47% to 15.5p per share, so we are
well placed to lift the Interim Dividend by 8% to 4.43p per share.  Interest
cover is over 11/2 times, debt maturity is unchanged at a weighted average of 18
years with the interest down at an average rate of 6.26%.  83% of debt remains
at fixed or capped interest rates.  We thus have an excellent base for the
upturn, and committed and future development expenditures are not only well
within our own resources, but can be met without impairing continuance of our 22
years' run of uninterrupted increases in dividends.

Fully diluted net assets per share have risen 10p to 870p - thus overall our
values have held up well.  A 4.1% uplift in the retail sector compensates for a
3.9% decline in office values, proving again the merits of our well diversified
portfolio.  Within these broad sectors, as one would expect, there are
considerable variances.  City offices are down 4.8%, while supermarkets are up
4.7%.  With the benefit of the stamp duty adjustment for "disadvantaged" areas,
the outcome is a minor uplift of some #18 million in value over the 6 months.
Even so, the valuation and hence shareholders are still suffering a #160 million
hit from Government's arbitrary increases in stamp duty.

A Strong Market

The investment market has been strong, as our capital and trading profits
clearly demonstrate.  Including joint ventures, sales at #192 million have been
higher than the #17 million of purchases.  There is plenty of investor demand
and our asset managers continually seek out buildings in the portfolio where a
sale is appropriate.

A noteworthy sale completed in the half year was the residual 27% of the St.
Stephen's Green Shopping Centre in Dublin for 64 million euros.  The Centre was
a highly successful development by British Land in 1988 and further extended in
1997.  It has been a good time to take profits on smaller units, such as 3
Somerfield stores in Chepstow, Kingswinford and Monmouth which together realised
over #10.7 million.  Overall we like what we have in the portfolio but we are
always ready to alter course to meet changes in the market.

We took sales opportunities in the joint ventures too.  Sales by BL Universal,
the joint venture with GUS plc, raised #47.6 million and those by the Public
House Company, the joint venture with Scottish & Newcastle plc, brought in #16.3
million.

Active Financing

Managing and finessing finance have long been features at British Land, and we
have been very active in this area recently, a business in itself, raising over
#670 million.  The liquidity was available and interest rates were attractive.
Our approach has been diverse with no less than 6 separate financing initiatives
completed.

To turn to our banking, for many years we have maintained an extensive unsecured
book of committed bilateral and syndicated bank facilities, and we have good
relations with 60 banks in all.  These bank lines underpin our flexibility in
the market.  Recently Barclays Bank, Danske Bank, The Royal Bank of Scotland and
Sumitomo Mitsui Banking Corporation Europe were mandated to raise a new
syndicated facility of #250 million, which was over-subscribed by 14%, closing
at #285 million.  Agreed new or renewed bilateral bank facilities have added a
further #155 million.

A continuing source of funding for British Land is the borrowing capacity
deriving from the increasing rental income from securitised properties.  We have
raised an additional #50 million on the rental income of the Meadowhall Shopping
Centre, which now sustains a total issue of #875 million of fixed rate debt at
an average interest rate of 5.5% and an average maturity of 19.9 years.  The
Centre's rental income has now risen to #69.9 million.  The average rent per sq
ft is #54.50 (excluding M&S), up 36% from the #40 when we bought the Centre and
there is more to come, now and over time.  Increased rental income has arisen
also on the 35 Sainsbury supermarkets securitised in 2001.  To the #575 million
already raised we have tapped the market for an additional #84 million at an
effective rate of 5.8% for 15.5 years.

We again took advantage of the private placement market in the U.S.A., where our
name continues to be well known, raising fixed dollars, swapped into sterling in
the amount of #97.8 million, with a 12 year life at just under 6%.

On the equity side, just before the end of the half year we bought back a
further 1 million shares at a price of 497p per share.  We took a further step
towards raising the Company's international profile and constituency among a
wider U.S. investor audience by launching a Level 1 American Depository Receipt
programme, trading under the symbol BTLCY.  Two investor relations visits to the
U.S.A. this year have been well received.

Development

A year ago I indicated that we had anticipated the moderation in the current
development market and reduced our programme accordingly.  The cost to complete
this current work is #109 million and principally involves 1 Plantation Place
(539,000 sq ft, two-thirds let to Accenture), 2 Plantation Place (163,000 sq ft)
and 10 Exchange Square (163,000 sq ft at Broadgate).  Next stage projects, which
mainly have planning consents in place, will produce 3.89 million sq ft when we
are ready to go: there is only a written down #160 million, 1.8% of gross
assets, tied up in pre-development sites which are non-income producing.

Joint Ventures

It is nearly 9 years since we first embarked on a series of joint ventures with
major U.K. corporations.  The aim - which has been achieved - was to unlock
portfolios of desirable properties which were not on the market and assist our
partners through our management capability.  By placing those properties in
joint ventures the vendors retained half of their interest but, because of the
financing which we were able to arrange, they typically realised 85% of their
capital tied up in these assets, while British Land acquired a series of
investment half interests with potential.

We manage them actively, as exemplified by the Public House and BL Universal
ventures.  Most of the pubs in The Public House Company, the joint venture with
Scottish & Newcastle plc, have been profitably sold and all external debt has
been repaid.  BL Universal, the 1997 joint venture with GUS plc, originally
owned 982 units of which 894 have been sold profitably.  Capital released has
been recirculated, largely into retail parks selected by our asset managers, and
in repayment of debt.  The venture has shown a 12% annualised ungeared return
before tax, and we have carried through the rationalisation for GUS for which BL
Universal was designed.

The needs of the successful GUS business have changed, creating an appropriate
moment for us to buy out the GUS interest in this #761 million portfolio on
acceptable - and cordial - terms.  80% of the portfolio is retail warehouses and
shops, the remainder offices.  Such a purchase avoids all the transactional
costs of buying individual properties; there are no staff, we know all the
buildings, we have ample finance to cover the #120 million price for half the
equity, and we have total control.

Prospects

The stock market has sustained serious losses over the past 3 years, from which
it now appears to be making some recovery.  This, and renewed financial sector
recruiting, are encouraging for our prime City of London holdings.  Our
confidence in the City remains.  We own and control the entire Broadgate Estate,
recognised as a unique complex.  In particular Broadgate has never looked better
- following the #35 million improvements to its public spaces which are
appreciated by its tenants and ensure that it retains the best modern standards.
Property has remained an attractive asset class throughout - particularly if
it is buttressed by long leases to strong tenants, and the buildings themselves
are modern, of high quality, efficient design, well located and will appeal in
the future.

With its strong out-of-town retail content British Land's diversified portfolio
also meets these tests, and its business model makes it well placed to maximise
the upside with assured and increasing cashflow safeguarding the downside,
especially when the assets are financed with long, largely fixed interest
finance.  Serious owners of property know that rents and thus values give
consistent growth over time but at irregular intervals.  Rental movements are
not a smooth progression but occur in a series of spikes, giving in British
Land's case a superior return multiplied by closely managed gearing.

We undertake to be fast on our feet, whether it is in buying or selling or in
taking advantage of structural changes - such as any REIT proposals - or in
seeking out other ways to maximise our shareholders' wealth and store of value.


                              FINANCIAL HIGHLIGHTS

Profit and Loss Account                                     Six months to         Six months to
                                                        30 September 2003     30 September 2002

Net rental income                                                 #251.0m               #249.2m
Net rental income (Group)                                         #209.4m               #200.1m

Net interest payable                                              #163.7m               #164.8m
Profit on property trading and

disposal of fixed assets                                           #21.9m                 #3.1m
Underlying profit before taxation                                  #65.2m                #62.2m

Profit before taxation                                             #87.1m                #65.3m
Tax charge                                                         #11.5m                #12.8m

Adjusted diluted earnings per share                            15.5 pence            10.5 pence
Diluted earnings per share                                     15.2 pence            10.3 pence
Dividend per share                                             4.43 pence            4.10 pence





Balance Sheet                                             30 September 2003        31 March 2003


Total properties*                                                 #9,649.1m            #9,645.6m

Adjusted net assets                                               #4,362.3m            #4,318.5m
Net assets                                                        #4,195.2m            #4,129.3m
Adjusted diluted net asset value per share                        870 pence            860 pence

Group:
Debt / equity ratio                                                    100%                 101%
Mortgage ratio (debt / property & investments)                          49%                  49%


* Pre adjustments for UITF 28 and includes external valuation surplus on
development and trading properties

Total Return (adjusted diluted net asset value per share growth and dividend)
for the six months 1.7%.



                                                           30 September 2003      31 March 2003
Financing statistics (Group)


Net debt                                                           #4,344.5m          #4,361.4m
- Weighted average debt maturity                                  18.0 years         18.0 years
- Weighted average interest rate                                       6.26%              6.31%
- % of net debt at fixed or capped interest rates                        83%                83%
- % of debt ringfenced with no recourse to other
companies or assets in the Group
                                                                         63%                64%

Interest cover (net rents / net interest)                              1.53x              1.60x

Cash and available committed facilities                            #1,779.1m          #1,635.4m

- of which drawn                                                     #907.6m            #899.0m





                                FINANCIAL REVIEW


Financial Results

Gross rental income for the six months to September 2003, including our share of
joint ventures, increased by 1.7% to #270.6 million (2002: #266.2 million).
Group gross rents increased #13.7 million (6.4%), whereas our share of joint
venture gross rents declined by #9.3 million (17.4%) reflecting the active
property disposal programme in the joint ventures.  Group net rental income for
the period rose 4.6% to #209.4 million (2002: #200.1 million) mainly as a result
of rent reviews and new lettings.

British Land's share of joint venture operating profits reduced by 14.1% to
#39.1 million, again reflecting the disposals of joint venture properties.

Profit before tax increased by #21.8 million to #87.1 million (2002: #65.3
million).  Profits on sale of fixed assets in the six months amounted to #15.9
million (2002: #3.1 million) and trading profits #6.0 million (2002: #nil).
Underlying profits before tax, excluding these items, increased by 4.8% to #65.2
million (2002: #62.2 million).

The tax charge for the six months is #11.5 million, an effective rate of 13.2%
(2002: #12.8 million, 19.6%).

Adjusted diluted earnings per share increased to 15.5 pence (2002: 10.5 pence).

Adjusted diluted net assets per share increased by 5.8% from 30 September 2002
and by 1.2% from 31 March 2003 to 870 pence, from 860 pence.

Financing and Capital Structure

Approximately 50% of the Group's property value is financed by borrowings from a
variety of sources and with a spread of maturity dates.  The Group's financial
risk management policy is to maintain approximately 85% of debt at fixed and
capped rates with debt taken out under a range of maturities, including long
term facilities in order to match the Group's income profile from its long lease
lengths.  These policies concentrate economic exposure to the property market
and our portfolio's performance, and minimise exposure to short to medium term
interest rate movements.  The Group borrows using fixed and floating rate debt
and uses interest rate derivatives to produce the desired interest rate profile
for the Group's finances.

At 30 September 2003 net debt is #4,344.5 million (31 March 2003: #4,361.4
million).  Securitised debt of #2,832.7 million (31 March 2003: #2,878.2
million) is ring fenced with no recourse to other Group companies or assets.

The Group's mortgage ratio remains unchanged at 49%.  The mortgage ratio
including the Group's share of joint venture debt is 52% (31 March 2003: 52%).

The Group's weighted average interest cost is 6.26%, of which 83% is at fixed or
capped rates of interest, with a weighted average debt maturity of 18.0 years
(31 March 2003: 18.0 years).  This long term debt maturity profile balances the
Group's average unexpired lease term of 17.0 years.

At 30 September 2003 the market value of net debt and interest rate derivatives
was #467.1 million more than their book values.  The decrease of #19.6 million
from 31 March 2003 largely reflects higher underlying interest rates, offset to
some extent by reductions in our credit spreads.

Banking Finance

The Company took the initiative during the period to update the standard banking
covenant package it offers its wide range of bank lenders.  The Company has
bilateral and syndicated facilities from 60 banks - in aggregate these amount to
#1.7 billion, of which #0.8 billion is committed, available and undrawn - and
all these facilities continue to be provided on the basis of a similar document
incorporating the same financial covenants.  The new covenant replaced the
provisions limiting secured debt at 50% of adjusted capital and reserves with a
new limit of unsecured debt to unencumbered assets of 70%.  The overall gearing
limit of 175% of adjusted capital and reserves was not changed.  The revision
was agreed and documented on all bank facilities.

The financial arrangements with our banks provide a sound basis for future
funding with all important flexibility to maintain our opportunistic business
model.

A 5-year syndicated loan facility was successfully completed over the summer
incorporating the new covenant package and was oversubscribed raising #285
million.  We have since agreed new and renewed bilateral facilities of #155
million.

Securitisations

On 14 April 2003 the Group issued a further #50 million of notes securitising
the rental income stream from Meadowhall.  This is in addition to the #825
million of notes issued in December 2001.  The weighted average interest rate of
the issues is 5.5% and the weighted average maturity is currently 19.9 years.

On 7 July 2003 the Group paid #73.5 million to redeem the outstanding Class D
Fixed/Floating Rate Unsecured Notes 2014 issued as part of the Broadgate
Securitisation.  These notes, which had a coupon of 7.1107% and a weighted
average maturity of less than two years, were redeemed at a premium of #1.7
million.

On 6 October 2003 the Group issued a further #75.5 million of notes securitising
the rental income stream of certain Sainsbury's Supermarkets raising proceeds of
#84 million at an effective rate of 5.8%.  The weighted average interest rate of
the total issue is 6.77%.  The current weighted average maturity is 15.1 years.

US Dollar Private Placement 2015

On 3 October 2003 British Land issued US$154 million 6.30% Senior Notes due 2015
as a further US private placement to institutional debt investors.  A
cross-currency swap was simultaneously executed, effectively converting the
issue into Sterling at a fixed rate of 5.999% for the term.

Dividend

The directors declare an interim dividend of 4.43 pence per share payable on 20
February 2004.  This represents an increase of 8.0% over the 2002 interim
dividend of 4.1 pence per share and is in line with our policy of progressive
dividend growth.

Cash Flow

Profits after interest, tax and working capital movements, generated a positive
operating cash flow for the six months of #65.9 million (2002: #20.3 million).

Property and investment disposals by the Group and cash returns from joint
ventures realised cash of #137.7 million.  Property acquisitions, developments
and investment expenditure by the Group amounted to #132.3 million.


                              PORTFOLIO HIGHLIGHTS


Portfolio Valuation by Use             Group         JVs+        Total    Portfolio      Change*
                                          #m           #m           #m            %            %

Offices
City                                 2,831.0        227.5      3,058.5         31.7         -4.8
West End                               634.2         37.5        671.7          7.0          3.1
Business parks & Provincial            106.8         71.3        178.1          1.8          2.0
Development                            505.1         14.6        519.7          5.4         -8.5

All offices                          4,077.1        350.9      4,428.0         45.9         -3.9

Retail

Shopping centres                     1,785.7        120.3      1,906.0         19.8          4.2
Supermarkets                         1,109.9        209.9      1,319.8         13.7          4.7
Retail warehouses                      770.6        332.9      1,103.5         11.4          3.5
Shops                                   92.9        294.6        387.5          4.0          3.7
Development                             19.9          0.8         20.7          0.2          3.0

All retail                           3,779.0        958.5      4,737.5         49.1          4.1


Industrial and distribution            142.4         18.1        160.5          1.7          3.2
Residential                            217.6          4.2        221.8          2.3          0.6
Leisure                                 62.6         29.6         92.2          0.9          1.6
Other development                                     9.1          9.1          0.1          1.3

Total                                8,278.7      1,370.4      9,649.1          100          0.2

+ British Land's share

* after adjustment for purchases, sales and capital expenditure





Total funds under British Land property management over #11 billion including
partners' shares of joint ventures.



Portfolio Valuation by Location                                         Total          Portfolio
                                                                           #m                  %

London:

City                                                                  3,525.1               36.5
West End                                                                722.2                7.5
Greater London                                                          471.0                4.9

Total London                                                          4,718.3               48.9

South East England                                                    1,064.0               11.0

Wales & South West England                                              508.1                5.3

Midlands & East Anglia                                                  785.1                8.1
North of England                                                      2,151.9               22.3
Scotland & Northern Ireland                                             382.1                4.0
Republic of Ireland                                                      39.6                0.4

                                                                      4,930.8               51.1

Total                                                                 9,649.1                100



Long Lease Profile                                  Weighted average lease term, years

(excluding residential* & developments)
                                                  to expiry               to first break
                                                       mean              mean      median
Offices
City                                                   14.1              12.0        13.3
West End                                               13.9              11.7         9.2
Business parks & Provincial                            12.8               8.4         5.3

All offices                                            13.9              11.7        13.3


Retail

Shopping centres                                       16.3              16.1        18.5

Supermarkets                                           22.0              22.0        21.2

Retail warehouses                                      17.4              17.2        17.2

Shops                                                  26.5              23.5        24.4


All retail                                             19.5              19.0        20.5


Industrial and distribution                            14.3              14.0        12.5

Leisure                                                28.6              27.2        19.2


Total                                                  17.0              15.7        15.8


* predominantly let on short leases




Vacancy rate only 2.4% of total portfolio ERV.


Tenant Risk Profile: 92% of rental income rated at negligible, low and low/
medium risk, by IPD based on Dun & Bradstreet Stress Score.


Security of Income - sensitivity analysis              % of income remaining at:
(from 30 September 2003)
                                                      expiry         first break
5 years                                                 93.5                90.7
10 years                                                79.8                71.3
15 years                                                62.7                56.0


includes joint ventures
assumes no re-letting after first break or expiry



                                  Annualised Net      Reversionary      Current     Reversionary
Current Reversions                      Rents #m            income    net yield        net yield
                                                      (5 years) #m            %      (5 years) %
(excluding developments)

Offices
City                                       182.8              21.2          6.0              6.7
West End                                    38.8               7.9          5.8              7.0
Business parks & Provincial                 15.2               0.6          8.5              8.9

All offices                                236.8              29.7          6.1              6.8


Retail

Shopping centres                           104.2              13.4          5.5              6.2
Supermarkets                                79.6               2.4          6.0              6.2
Retail warehouses                           65.3               7.6          5.9              6.6
Shops                                       23.6               3.0          6.1              6.9

All retail                                 272.7              26.4          5.8              6.3

Industrial and distribution                 10.6               2.6          6.6              8.3
Residential                                 12.5               0.1          5.6              5.7
Leisure                                      6.5               0.4          7.0              7.5

Total                                      539.1              59.2          5.9              6.6



Development Programme                Size          Rent*, pa       Construction          Cost to
                                                       (est)               cost         complete
                                     sq m                #m+                #m+              #m+

Committed projects                 80,490               41.0              312.8            109.3

Development prospects             362,300              103.4              686.7            660.7


Total                             442,790              144.4              999.5            770.0


* Headline rent

+ British Land share



Further income                                      Contracted       Not Contracted        Total
                                                            #m                   #m           #m

Annualised net rents, 30 September 2003                  539.1                              539.1
Reversions, within 5 years                                31.9                 27.3          59.2
Committed developments                                    19.4                 21.6          41.0
Development prospects                                                         103.4         103.4

Total                                                    590.4                152.3        742.7



PROPERTY REVIEW

Sales and Purchases

The investment market continued to be buoyant with strong competition between
purchasers.  The increase in medium term swap rates has had only a limited
effect in reducing the capacity of those reliant on gearing and there remains
keen interest from a wide range of international and local institutions,
corporates and individual investors.  In this climate, we have been active in
reviewing and bidding on acquisition opportunities.  We are not willing to chase
the market, where we believe some higher bids do not fully reflect the risks
involved.  We have a well balanced, high quality portfolio, which is strongly
positioned in sectors that conform to our strategy.  We do, however, continue to
seek opportunities where we can find value.

We have also continued to review our portfolio and have again been active
sellers, taking advantage of the current market.  Our trend of achieving sale
prices above the latest valuation has been maintained, at 11% in the half year
(9% last year).  This confirms the ongoing strength of the investment market.

Sales of #192 million, including joint venture properties and our share in the
Cherrywood Properties joint venture were completed in the six months to 30
September 2003.  These disposals involved 36 properties (excluding residential
units) and included our remaining interest in St Stephen's Green Shopping
Centre, Dublin for #44.8 million, 14 retail (mainly high street) units in BL
Universal for a total of #47.6 million and 11 pubs (at auction) for a total of
#16.3 million.  Since September, we have completed or exchanged contracts for
sales totalling a further #91 million, also at prices well above valuation.

Purchases of #17 million, including joint ventures, were completed in the six
months and have been valued at September 2003 at 12% above cost.  A further #4.5
million of residential investment acquisitions have been made in October.

On 17 November 2003, British Land acquired the 50% share in BL Universal PLC
held by GUS plc.  This joint venture company was established in February 1997
when it acquired 982 properties, being mainly high street shops with an average
lot size of #900,000, from the Great Universal Stores group.  Since then, the
joint venture portfolio has been repositioned:

*   894 properties have been sold (or relinquished) for a total of #768 million,

*   the proceeds have been reinvested during the course of the joint venture in 
    the acquisition and retention of 13 properties, primarily retail 
    warehousing, at a total cost of #357 million, with funds also utilised to
    repay debt and return cash to the joint venture shareholders,

*   a range of redevelopments and refurbishments have been carried out to 
    improve retained assets,

*   the portfolio now comprises 101 properties, with an average lot size of 
    over #7 million, some 80% retail warehousing and shops, and 20% offices, 
    with net rental income of some #50 million per annum.

This preferred portfolio has been managed and selected by us over the last 6
years in the joint venture.  The purchase price was based on the independent
valuation of ATIS REAL Weatheralls at #761 million as at September 2003.  The
purchase of shares is an efficient form of acquisition where transaction costs
are low.  Taking into account income and capital returns to British Land from
the joint venture since inception and its November 2003 market value, the
venture has shown a 12% annualised ungeared return before tax.

BL Universal owned a 40% interest in the St Nicholas Centre, a 10,700 sq m
(115,000 sq ft) Shopping Centre in Aberdeen with a strong tenant mix, mainly let
to national multiple retailers.  In a series of transactions, on the day of our
acquisition of the GUS share in BL Universal, British Land purchased both the
outstanding 60% interest in St Nicholas Centre for #31 million and the remaining
long leases of a further two prime shops in the Centre for #11.6 million.  We
are pleased to have been able to piece together these interests, which will
enable us to consider plans for the future development of the entire Centre.

Property Asset Management: annualised net rents #539.1 million

We continue to grow rental income from active management of the portfolio.
Annualised net rents at September 2003 were #539.1 million.  This compares to
#545.8 million as at March 2003 but reflects a reduction of #18.975 million per
annum due to a rent free period granted to EBRD in exchange for an extension of
lease term and removal of a tenant's break clause.  EBRD rent payments will
recommence in November 2006.  After taking into account sales, annualised net
rents have increased by #18 million due to rent reviews, new lettings and expiry
of rent free periods.

At Meadowhall we have concluded 23 new lettings and 7 rent reviews increasing
income by #1.6 million per annum.  Total rental income is now #69.9 million per
annum.  The major refurbishment of the popular "Oasis" foodcourt has been
completed, providing some 400 additional seats to a total capacity of 1,400 (in
addition to the separate restaurant and cafe units).  We now expect increased
turnover at the units in the foodcourt, which will result in additional rents.

At Broadgate, in the half year, rent review settlements have been reached on
four tenancies, totalling 41,800 sq m (450,000 sq ft), increasing the passing
rent by over #1.1 million per annum.

Voids in the portfolio are very low at 2.4% of total rental value, including
areas under offer and those subject to asset management initiatives.

Reversionary income from the current investment portfolio is expected to
increase rents by #59.2 million within the next five years, of which #31.9
million is already committed (#18.975 million from EBRD and the balance arising
on the expiry of rent free periods and minimum rental uplifts contracted under
existing leases).  Further income will be generated from the development
programme, where #19.4 million is already contracted under pre-lets.


Further income                                      Contracted    Not Contracted       Total
                                                            #m               #m           #m

Annualised net rents, 30 September 2003                  539.1                         539.1
Reversions, within 5 years                                31.9             27.3         59.2
Committed developments                                    19.4             21.6         41.0
Development prospects                                                     103.4        103.4

Total                                                    590.4            152.3        742.7


Portfolio principal sectors

Retail represents 49% of the total portfolio by value.  Our primary focus is on
out of town investments which account for 80% of the retail portfolio, the
remaining 20% being in high street and town centre shopping schemes.  Retail
sales are continuing to grow (for the 3 months to October 2003 at 3.7% higher
than a year ago) although at a slower rate than previous years.  Out of town
shopping continues to take an increasing share of total retail spend, current
sales growth is projected at 6% per annum.  Consumer preference and a limited
supply of these properties have resulted in sustained retailer demand, improved
rents and increased values.

Supermarkets have been the best performing class in the portfolio this half year
with prime estimated rental values continuing to rise and yields tightening.
Store size is critical to operators who are continually expanding their range of
goods.  The average size of the Superstores, which represent 95% by value of the
overall supermarkets portfolio, is now 6,450 sq m (69,500 sq ft) and we continue
our programme of extensions.

At Meadowhall, visitor numbers between April and September 2003 are 1.9% higher
than the equivalent period in 2002, reaching a total of 24.4 million for the
year.  The average spend per party has risen in each month surveyed, April to
September 2003, over the same month in 2002.

Offices represent 46% of the total portfolio by value and, of this, 95% is in
Central London.  The Central London investment market remains strong with #4.4
billion of transactions recorded in the first three quarters of 2003.  However,
letting activity remains subdued.  At the end of Q3 2003, agents' research
indicates the City market vacancy rate had increased to around 14% of total
office space.  It is expected that the small amount of new supply in hand will
complete in 2004 and thereafter no further significant new supply is
anticipated.  We are encouraged by the recent increase in 'viewings' by tenants
and that the job losses in the City appear to be at an end, with some sectors
now considering recruitment.  Recent research indicates that employment in
existing businesses in the City is expected to increase over the next four
years.  If take up of space even at the historically low 2003 levels is
achieved, the vacancy rate is forecast to fall and in 2005/6 we can expect
rental growth to return.

British Land's City office investments are of high quality and in the best
locations, and have income generated from long leases with upward only rent
reviews from strong covenants.  The weighted average lease length of the City
office portfolio is 12 years to first break and 14 years to expiry.  With upward
only rent reviews, rental income can only fall at lease expiries or on tenant
breaks.  Accordingly, capital values are protected by this long lease profile.


Controlled Development Programme

                                           Net Area       Rent+  Construction cost      Cost to
As at 30 September 2003                        sq m    (est) pa                        Complete

Completed       Total                         8,680       #1.0m             #5.2m             -
                British Land Share                        #1.0m             #5.2m             -

Committed       Total                        80,490      #41.0m           #312.8m       #109.3m
                British Land Share                       #41.0m           #312.8m       #109.3m
Development
prospects
                Total                       362,300     #113.8m           #761.7m       #732.1m
                British Land Share                      #103.4m           #686.7m       #660.7m


Total                                       442,790     #154.8m         #1,074.5m       #841.4m
British Land Share                                      #144.4m          #999.5 m       #770.0m

+ Headline rent



During the last six months, the third phase of the distribution warehouse
development at Heathrow Gateway was completed.  Negotiations with potential
tenants are in hand.

Committed projects are now limited to 1 Plantation Place, EC3 (part pre-let to
Accenture), 2 Plantation Place, EC3, and 10 Exchange Square, EC2 (Broadgate).
These office developments are proceeding on programme and budget.

Development prospects are sites and properties where opportunities for
development have been identified and are being progressed through design and
planning.  Examples from the half year include achievement of improved planning
consents at 201 Bishopsgate, EC2 (offices), Thatcham, Berkshire (distribution)
and York House, W1 (offices and residential).  84% (by area) of development
prospects now have detailed or outline planning consents.

These projects will be undertaken in stages, in line with our strategy of adding
quality assets to the portfolio, with construction commitments made either on
pre-lets or on the basis of anticipated market demand.

Valuation

All the properties owned by British Land and the joint ventures were valued by
independent valuers, principally ATIS REAL Weatheralls, whose commentary on the
commercial property market follows this review.

The portfolio, including British Land's share of joint ventures, was valued at
#9,649.1 million, a small increase (on a like-for-like basis, after adjustment
for purchases, sales and capital expenditure) of 0.2%.  This valuation benefited
from the stamp duty relief in respect of properties in defined "disadvantaged
areas" provided in the April 2003 Budget, to the extent of some #120 million.

The portfolio valuations by use and by sector, and the changes over the half
year, are shown on the highlights at the front of this section.

Outlook and Strategy

The retail sector has continued recent trends, with growth in rents,
particularly for out of town properties, and with good tenant demand.  Office
rents in Central London have softened.  The investment market overall remains
buoyant with demand from a wide range of UK and overseas investors and support
from lenders.

The portfolio as a whole, due to its balance between retail and offices, coupled
with the long lease profile, has shown resilience to the softening of Central
London office rents and values, our retail portfolio effectively underpinning
office value declines over these first six months.

We maintain our approach to portfolio review and anticipate further sales over
the remainder of the year.  We expect to continue to seek acquisitions, where we
find the right value opportunities.


                              ATIS REAL WEATHERALLS -
                     COMMERCIAL PROPERTY MARKET COMMENTARY

The comments below reflect our views as at 30 September 2003 and underlie our
approach to the valuation of the portfolio.

General

Investment demand, based largely upon the level and certainty of property's
income returns, has remained strong.  This has come from both domestic and
overseas buyers, ranging from Property companies and other 'Professional'
investors, to private individuals.  The scope to add value and the underlying
value of "bricks and mortar" has added to property's appeal.  Favourable
interest rates have encouraged debt financed purchases and disillusionment with
other asset classes has generated demand from a range of cash buyers.

Although there have been concerns over certain occupational markets (mainly City
and South East provincial offices), these have been mitigated in investors'
minds by the security afforded by longer 'upward only' lease income.

Offices

Over much of 2003 the outlook for many traditional City occupiers has been
constrained by the slowdown in various economies and financial markets.
Consequently take-up has been low and rental values have fallen.

There is a substantial supply of available City office space, but only about a
third of this is "Grade A" and in historical terms there is relatively little
new development scheduled.  This reflects a far more cautious approach on the
part of developers and their banks.

Looking forward to recovery some investors consider that the prices of short
term income, 5-6 years un-expired, offer good value as prices reflect current
rent levels.  At the other extreme, yields for longer income streams, more "bond
"like property investments, have held firm at around 6%.  One positive sign is
the increase in viewings recently reported by letting agents.  So far these are
mostly from cost conscious tenants, looking to benefit from the competitive
terms on offer.

A high quality managed environment in a core location, such as Broadgate, which
is effectively fully let, should therefore be well placed to benefit in both
rental and capital terms when demand increases.

In the West End yields are generally lower.  This is principally because the
occupier market comprises a wider range of business sectors, making it less
volatile.  Supply is also more limited due to clearer geographical boundaries
and a planning regime that is geared to a greater proportion of residential use.
This has favoured Regents Place, the company's main holding here, as there are
few buildings which can offer floorplates of the size and quality provided
there.  As a result it has attracted high calibre tenants, such as Abbey, who
have entered into long term lease arrangements.  This combination is
particularly sought after by investors, and its investment value has benefited
accordingly.

Retail

Consumer spending has remained robust.  This has been based on house price
growth, full employment, and low interest rates.  Retail sales across most
sectors have continued to grow.

Demand for shopping centre investments has produced the most significant yield
shift within the sector.  They combine the opportunity to create value by active
management, as illustrated within British Land's holdings by the increases in
rental values at several centres, with the traditionally low volatility of high
street shops.  The latter have attracted keen prices, particularly in towns and
cities where there is felt to be latent rental growth.  In all locations small
lot sizes continue to attract strong interest from private buyers.

Out of town, retail warehousing has again been the best performing property
sector.  This has arisen principally from improving rental values.  Yields have
remained broadly at their existing low levels, reflecting keen demand from a
wide pool of investors.  The consensus is that rents will continue to rise
strongly.  This is due to occupier interest from an ever-increasing range of
retailers set against an extremely restrictive supply of buildings.  The
planning controls that have created this situation are likely to become even
tighter.  This can only increase the appeal of the existing stock to both
occupiers and investors alike.

Supermarket values have increased again.  This reflects a general demand for
long let, secure income streams, but also strong underlying residuals, the scope
for rental improvements, and the scarcity of such investments.  Investors'
expectations will also have been boosted by a recent supermarket rent review at
Trafford, where the Expert determined a figure well in excess of historical
food-store rental levels.


ATIS REAL Weatheralls
Norfolk House
31 St James's Square
London   SW1Y 4JR


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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