Chairman's Statement

British Land Co PLC
30 November 2000

Chairman's Statement

It has been a lively half year. Even without a repeat of the massive £41.9
million contribution from property trading which we achieved in the first half
of last year, pre-tax profits for the six months ended 30th September 2000
were still £83.5 million (1999 - £97.4 million).

Net Assets per share for the six months are up 5.4% at 731p.

The profits largely derived from rents which have been rising and have
reversions still to come.  Gross rents were £190.1 million (1999 - £172.8
million), net rents £180.1 million up 11.7% (1999 - £161.3 million).

Earnings per share were 12.8p (1999 - 15.3p).  The taxation charge was £17
million, 20.4% (1999 - £18.1 million, 18.6%).  We are lifting the interim
dividend by 5.9% from 3.4p to 3.6p per share.

The Portfolio

Overall the portfolio has risen 1.8% over the last six months with the office
sector showing particular strength.  At Regent's Place values are up 4.6% and
offices as a whole are up 4.7%.  The core holding at Broadgate is up 5.7% at
£2,500 million.  Broadgate's average passing rent is £41 per sq ft, and there
are 1.24 million sq ft for review currently and over the next year, where
existing rents range from £32.50 per sq ft to £47 per sq ft.  Net effective
Estimated Rental Values (ERVs) at Broadgate are generally at £48.50 per sq ft.
On this basis external valuers are calculating an increase in passing rents
from £147.9 million to £166.3 million at Broadgate over the next four years -
and this without any assumptions of growth, particularly of the latest
indications of much higher rents which are well above our 30th September ERVs.

Rent reviews at Meadowhall are beginning to come through at or above the
target levels set when we made the acquisition, showing the property's
reversionary strength.  Rental income has already risen from our initial £45
million per annum to £55 million, and we are on course for at least £66
million from the current round of reviews.  At 30th September 2000
Meadowhall's value was unchanged at £1,280 million.

Elsewhere retail values have been flat, with a 2.7% fall in high street shops,
a 0.6% rise in retail warehouses, and little change at the shopping centres. 
Supermarket rents are edging upwards but a softening in investment rates
accounts for the slight decline (1.3%) in value.

Now to the general issue of the rent review process.  Under present
conditions, landlords and tenants alike will on occasion fail to negotiate the
optimum bargain - but that is the risk of the market.  A poorly crafted
leaseback, for example, can do long-term damage to a landlord.  Yet that does
not indicate that the system itself is flawed, as some of the less effective
retailers are suggesting to Government.  Tinkering to suit one side's moans is
not an objective basis for legislation to interfere in the market's operation.
Landlords might also express to Government that the Landlord & Tenant Act 1954
has outlived its usefulness and only favours tenants and should therefore be
repealed.

Development

The development programme, including joint ventures and involving a £1.2
billion spend on construction alone, continues to make substantial progress. 
The Abbey National's attractive new 196,000 sq ft head office at Regent's
Place has been topped out, and work is well advanced also on the adjacent
130,000 sq ft office building which we are developing to rent.

At Blythe Valley Park, Solihull, the development of a 1.2 million sq ft
Business Park with joint venture partner ProLogis is progressing well.  Phase
I (250,000 sq ft) was sold to Oracle and a further 403,000 sq ft of buildings
are under construction.  Almost 85% of this space has been pre-let to major
occupiers including Ove Arup, Centrica, Virgin Active and Regus.

At our development on the 420 acre site south of Dublin at Cherrywood, in
partnership with Dunloe Ewart, detailed planning permission has been granted
for the next five buildings of the Science and Technology Park, totalling
250,000 sq ft, and construction of the first three buildings of 124,500 sq ft
is under way.

The Company is developing a 220,000 sq ft distribution unit pre-let to Royal
Mail at its Heathrow Gateway site at Feltham.  Detailed planning consent has
been secured for a further 210,000 sq ft.

At East Kilbride, the Company has concluded a letting to Debenhams for the
110,000 sq ft anchor department store at its 250,000 sq ft Centre West
Shopping Centre development.

We are in discussions with prospective tenants for our major schemes in the
City of London at Plantation Place, Fenchurch Street, EC3 and 201 Bishopsgate,
EC2 totalling 1.3 million sq ft, and where significant progress on the
building works will allow us to take advantage of the current shortage of
large space buildings.

The Joint Ventures

British Land employs Joint Ventures - JVs - as the means to hold £1.4 billion
of its assets primarily in the areas of development, retail and leisure.  The
Company also manages its partners' shares of JVs amounting to a further £1.4
billion, so that assets under management total £9.6 billion.  

There are three features of our JVs - investment, development and
venture-specific finance.  Some JVs embrace all aspects.  Though there are
differences of detail, all British Land's JVs share a simple common framework:

- they are owned 50:50 with our partners
- they are able to raise finance on the strength of their own balance sheets
with minimal or no support from either partner, thus enhancing the gearing
benefit with negligible risk
- in many instances JVs have been the point of access to desirable properties
which were not on the market
- British Land earns fees from services it provides to JVs.

New Venture with WestLB

We formed a new joint venture - our thirteenth - with WestLB, Westdeutsche
ImmobilienBank and Provinzial-Feuerversicherungsanstalt Der
Rheinprovinz-Versicherung Der Sparkassen to acquire four British Land
properties in the City of London.  

The consideration for the transaction was £357.5 million and WestLB has
underwritten a loan to the JV in the amount of £265 million.  British Land
retained a 50% interest in the venture and received £307.5 million in cash.

The properties were three office buildings developed in 1992: 1 Fleet Place,
Ludgate, London EC4, 170,000 sq ft net; 10 Fleet Place, Ludgate, London EC4,
182,000 sq ft net; 100 New Bridge Street, Ludgate, London EC4, 166,000 sq ft
net; and Watling House, 33 Cannon Street, London EC4, an office building we
constructed in 1998 and comprising 96,000 sq ft net.

BL Universal

BL Universal PLC (the joint venture between The British Land Company PLC and
The Great Universal Stores P.L.C.) has purchased the freehold interest in the
Castle Vale Retail Park, Birmingham.  The transaction involves a forward
purchase at a price close to £50 million, the development to be completed in
approximately six months.  It comprises a food store and petrol filling
station of 80,000 sq ft let to J. Sainsbury plc, with a further 85,000 sq ft
of open A1 retail units let to a number of tenants including Argos Limited and
Comet Group Plc, and a 3,000 sq ft restaurant together with an amenity block
of 10,500 sq ft.  The site includes 703 car parking spaces. 

BL Universal has also purchased for £21 million a 66,000 sq ft superstore with
petrol filling station let to J. Sainsbury plc and a 25,000 sq ft leisure unit
let to Gala Holdings Limited, together with 585 car parking spaces, at New
Cross Road, New Cross, London SE14. 

At the same time BL Universal continues to rationalise, and has a portfolio of
85 properties on the market.  Of its original 982 properties, no less than 702
have already been profitably sold and the proceeds reinvested primarily in
retail parks.

BL Fraser

We further cemented the relationship with House of Fraser plc in our joint
venture, BL Fraser, by agreeing to buy Bentalls department store in Bristol
for £15.6 million.

The purpose built department store, which was comprehensively refurbished by
Bentalls in 1998, is situated in the heart of Bristol's main shopping area. 

On completion of the purchase in January 2001, BL Fraser will lease the entire
property to House of Fraser on a 40 year lease at a rent of £1,237,500 per
annum, subject to 5 yearly upwards only rent reviews.  In common with the rest
of the leases applying to the existing 15 stores in the joint venture to House
of Fraser, the first two reviews will enjoy guaranteed minimum increases based
on 3% per annum.  This latest acquisition brings the total store area owned by
the joint venture to over 2 million sq ft.

What a Liberty!

We were inhibited by Takeover Panel rules at the time, but we are now free to
comment on our proposal to take a stake in Liberty International PLC.  We
offered to buy 29.7% of Liberty International PLC from two of its
shareholders.  On the basis we put forward, the transaction was self-financing
and, on a see-through basis, was NAV neutral.

We were not prepared to raise our bid on value grounds when a competitive bid
emerged, instead collecting compensation of £16.6 million as we had always
foreseen the possibility of our bid being exceeded.

Other Transactions

British Land bought for £27.5 million the freehold interests of Broadgate
House and Eldon House, Eldon Street, London, EC2 which are expected to offer
development prospects.

The properties are situated within Eldon Street, at either end of a block
adjacent to the Broadgate Estate. Both buildings are fully let at a current
reversionary rent of £1,730,000 per annum and comprise a total of 72,000 sq ft
of office, retail, public house, wine bar and ancillary space. 

Finance

In April, British Land's unsecured bank facilities were augmented by a £300
million five year revolving credit syndicated by Barclays Bank PLC.

At 30th September 2000 the 'mark to market' adjustment of debt was reduced to
£129.4 million, equating to 17.5p per share net of tax (31st March 2000 -
£178.8 million, 24.2p per share net of tax).  Debt was 89% fixed interest, 6%
capped and 5% at variable rates.  We shaved the weighted average interest rate
to 7.02% from 7.05% and the weighted average debt maturity was 17.6 years
(18.4 years at 31st March 2000).

British Land's cash and committed undrawn facilities at 30th September
increased to £1.5 billion.  

Shareholders will be pleased that our Report and Accounts 2000 won the
Accountancy Age Award for Excellence, our disclosures being described as '- at
the forefront of best practice, and in particular the narrative statements of
the treasury policy and financial risk management and joint ventures are
considered to be sector leading and add clarity to the numerical disclosures'.

e-Commerce and Property Services

We have been reviewing all aspects of our business in the light of the
opportunities, and the threats, inherent in e-commerce.  As with all new
concepts, execution and careful budgeting are everything.  We have also been
looking at our buildings to see whether new broadband or wireless technology
can be provided directly to our tenants, or, as with 2G and 3G mobile phone
aerial installations, simply affords extra opportunities for rental.

With 40,000 people working at Broadgate every day, and with a demographic
profile that appeals strongly to the marketing sector, we are introducing a
community portal containing a directory of local information and services, as
well as all the possibilities of e-commerce at the desk-top.

At Meadowhall, we are working closely with our retail tenants to explore the
possibilities for on-line shopping, a loyalty card, mobile phone marketing and
for a major regional distribution hub where our 500,000 weekly customers can
collect both on-line and off-line purchases, or source home delivery services.

Board

In July we welcomed to the Board two new non-executive directors.  Derek Higgs
is Chairman of Partnerships U.K. plc, and a Non-Executive Director of Allied
Irish Banks PLC, egg plc and Jones Lang LaSalle Inc.  Lord Burns is a
Non-Executive Director of Legal & General Group plc and of Pearson plc.  He
has recently accepted an appointment as Chairman of the Lottery Commission.

Prospects

Three elements provide the focus of British Land's £8.2 billion property
portfolio, interacting with our financing initiatives.

- £3.4 billion is invested in London offices, principally the Broadgate
Estate, where British Land's holdings extend to 3.75 million sq ft in 16
buildings on a 30 acre site.  A dedicated management team provides economical
servicing at this premier location.

- £3.7 billion is invested in retailing, of which £1.8 billion is in shopping
centres with Meadowhall accounting for £1.28 billion.  Retail warehousing and
supermarkets represent £1.5 billion.

- The remaining £1.1 billion incorporates development, and a strategic
diversification into leisure, industrial and provincial office properties.

The healthy rise in City rents continues to more than justify our significant
investments there (35% of the portfolio), and we look forward to a stream of
improved capital and income returns. We have included a Sensitivity Analysis
in the Interim Report to show the effect of various rental rates and yields on
Broadgate's capital values.  Retail property of high quality such as
Meadowhall retains its outstanding attraction to shoppers, is trading well and
can also be expected to provide sustained growth.

Property remains a long-term macro business and is one of life's necessities. 
Provided that the fundamentals of covenant quality, finance and location are
sound, it will deliver, and we will not be knocked off course by short-term
considerations.

Real tangible assets may lack the ephemeral and suspect excitement of
virtuality but they earn a good lasting return with growth.  These are
qualities which perceptive value investors are beginning to appreciate again.

John Ritblat
29th November 2000

BROADGATE SENSITIVITY ANALYSIS
Prepared by Weatherall Green & Smith
September 2000

Nominal
Equivalent
Yields       

            Capital Values at various rentals and yields (£ Million)
5.50%       £2,884       £2,962       £3,221       £3,480       £3,739
5.75%       £2,756       £2,830       £3,076       £3,322       £3,568
6.00%       £2,639       £2,709       £2,943       £3,178       £3,412
6.25%       £2,536       £2,603       £2,826       £3,050       £3,273
6.32%       £2,500       £2,566       £2,787       £3,007       £3,227
6.50%       £2,426       £2,490       £2,703       £2,916       £3,129

Net Effective
Estimated 
Rental 
Values 
(per sq ft) £48.50       £50.00       £55.00       £60.00       £65.00


NOTES:

Broadgate's current value: £2,500 million

Net Effective Estimated Rental Value Rates (£ per sq ft):

An Estimated Rental Value of £48.50 per sq ft was used as a base.  Percentage
increases were applied to this base to reach £50, £55, £60 and £65 per sq ft. 
An Estimated Rental Value of £48.50  per sq ft was used as the base because
this rate has been applied to the majority of the accommodation within
Broadgate.  Smaller space enjoys a premium and under our valuation a Net
Effective Estimated Rental Value of £52.00 per sq ft has been applied to this
space.  Net Effective Estimated Rental Values are calculated by adjusting
'headline' rents, assuming a notional 9 month rent free period over a ten year
term.

Nominal Equivalent Yields:

The Nominal Equivalent Yields are calculated assuming rents are received
annually in arrears which is usual valuation methodology. In practice,
however, rents are received quarterly in advance.

Properties included:                                    Properties
                                                        excluded
                                                       (Held for Development):

1 Finsbury Ave              175 Bishopsgate             Eldon House
2 Finsbury Ave              199 Bishopsgate             Hamilton House
1,2,3 Broadgate             Broadwalk House             201 Bishopsgate
4 Broadgate                 Exchange House              Broadgate House
6 Broadgate                 Broadgate Health Club       
8-12 Broadgate              135 Bishopsgate

An Extract from the Weatherall Green & Smith Valuation Certificate

'MAJOR VALUATION ISSUES

General

We are pleased to have completed, for the first time, an interim valuation of
the majority of the portfolio both wholly owned and in joint ventures.  The
portfolio is little changed since the last year end valuation and therefore
continues to comprise modern property let on long leases to good covenants. 
The emphasis remains on larger and higher quality investment buildings in the
retail and business space sectors with more limited interests in leisure

We have, as is usual practice, deducted purchasers' costs in arriving at net
valuation figures. In the case of larger lots such as Broadgate and
Meadowhall, these amount to anything up to around £150m in Stamp Duty alone.
Across the entire main fund portfolio costs of purchase deducted amount to
about £330,000,000.

The City of London and Mid Town.

Since our March valuation there has been continuing evidence of rental growth
reflecting a general shortage of good quality space. Recent speculative
completions have achieved rents of around £2.00-£3.00 psf higher than those
that prevailed as little as six months ago. The demand side is robust such
that when combined with vacancy rates, take up and the limited future supply
of accommodation, we expect that rents will rise further over the next 18
months to two years. There is a broad range of requirements, for various
sizes, such that even the second hand space liberated by occupiers
consolidating into newer, larger buildings should be taken up rapidly. 
 
Despite this, in the period leading up to our valuation there was reluctance
on the part of investors to bid keenly for the not insubstantial volume of
investment stock available. Transactions have been frequently completed by
groups of private investors or other debt financed buyers. This, in part,
explains the relatively high initial yields demonstrated.

One particular exception to this, which has assisted in our appraisal of the
Broadgate estate, was an institutional purchase which can be analysed to show
an initial yield of about 5.5%.

Having said this, there is nothing within the City directly comparable to the
Broadgate estate, extending across some thirty acres, in terms of the
flexibility, control and longer term redevelopment opportunities that an
efficiently managed environment of this scale can offer. The existing
buildings are constructed so that a complete overhaul of either services or
finishes can be efficiently achieved. This was successfully demonstrated at 1
and 2 Finsbury Avenue, occupied by UBS Warburg.

In the meantime, the estate offers very well secured income. The appetite for
this in the capital markets was demonstrated by the securitisation and
associated Bonds issue which took place last year.

As partnerships and various other forms of joint ownership become increasingly
common there is every reason to believe that the assets could be repackaged
into smaller lots were this considered desirable. It is with this in mind that
we believe the best price obtainable would be for the estate as a whole and it
is on this basis that we have reported. 

Mid town has seen further rental growth and your £357.50m Joint Venture
arrangement with West LB which showed a net initial yield of around 6.25%
underlines investor demand, reflecting a positive outlook for further growth.

The West End of London

Rental growth has continued such that the peak headline rents of £70.00 psf or
so, talked about 6 months ago, have now reached around £100.00 psf.  How much
higher peak rents will rise remains to be seen but, as in the City, there are
limited new large schemes coming on stream. We therefore anticipate that the
psychological barrier of £100.00 psf will be breached as rents have still not
reached previous top levels in real terms.

All of this should greatly benefit your substantial holdings at Regent's
Place. 

At the Swiss Centre, Leicester Square redevelopment plans are being
progressed. Potential office values have risen steeply and the site offers
considerable scope for either retail or leisure, possibly providing a new
flagship store on one of the Capital's most densely populated thoroughfares.

Shopping Centres, Retail and Retail Warehousing

Prime parks and solus units have maintained investment yields but there has
been some softening of yields on poorer parks and, in particular, poorer solus
units where parking and opportunities to reconfigure are limited. 

There has been much talk of the unusually large number of shopping centre
investments on the market but these are generally of indifferent quality.
Sales that have occurred are generally where the purchaser sees scope for
active management and ability to add value.

At the very prime end of this market, Meadowhall Shopping Centre has
maintained its value, reflecting its strength as a regional centre, the
considerable number of asset enhancement activities completed over the past
six months, and its undoubted scarcity appeal as a longer term investment in a
select group of top class retail schemes.   

We consider the current 'shakeout' of retail occupiers to be healthy and
likely to benefit the retail investment sector in the medium term. The ease
with which C&A have filled their space is encouraging and shows the ongoing
requirement for larger retail units.  Investors are, however, still taking a
cautious view with regards the prospects for immediate rental growth in all
but a few locations. 

The perceived impact of 'e-tailing' seems to have subsided and, generally, to
have been overstated. It seems that it is likely to sit alongside many
established retailers' high street outlets as simply another point of sale. 

Leisure

Investment appetite for all bar the most prime out of, or edge of, town
leisure parks has eased.  Within the pub portfolio rental increases have
continued to come through at review. We suspect that many would appeal to the
smaller investor, an area of the market that has held up well, especially
at auction. The pubs have the benefit of long leases to a very strong covenant
which offers the scope to possibly repackage the income of a group of the
properties.

Department stores

There have been changes at the corporate rather than property market level. 
Examples are the completion of House of Fraser's flagship refurbishment on
Oxford Street and the acquisition of Bentalls by House of Fraser in Bristol.
Rents remain stubbornly low but at the same time this offers the opportunity
to acquire or hold substantial amounts of town centre real estate at low
prices per square foot capital until underlying potential is realisable.

Supermarkets

Little has changed over the last six months.  We see considerable potential in
not simply the buildings with the benefit of open retail consents but also in
the sites, offering attractive land and trading potential to other retailers
or developers.  Many of the sites include petrol filling stations which are,
potentially, valuable separate entities in their own right.

DISCLAIMERS

This valuation is provided for the stated purposes and is for the use only of
those to whom it is addressed.  No responsibility is accepted to any other
party.

No part of this certificate may be reproduced, or reference made to it,
without our prior written approval.  Furthermore, no reference may be made to
the certificate in any other publication without our written approval. 

Yours faithfully




Weatherall Green & Smith'