Operating and Financial Review

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• Operating and Financial Review
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  • British Land's activity in 2006/7
  • Portfolio reshaping
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• People

Individuals are essential ingredients in our long term success. It is important that we retain and attract motivated and skilled professionals able to deliver our strategy and work effectively in a small and focused team.

The business model is people light and asset heavy – it leverages the work, skill and judgement of a relatively small staff over a large value of efficiently financed assets. The strategy and business changes introduced in 2005 are designed to emphasise the 'human value added' in order to lift performance at the property level, whilst retaining efficient translation to profits and net asset value via financial and fiscal structure. This is all the more important in a market where outperformance is going to be delivered through superior rental growth and an activist approach to asset selection and management.

To accomplish our performance goals and the shift in business model, the Company is engaged in a process of management renewal and culture change, targeting a high performance, open and meritocratic culture where its people are motivated individually and as a team to outperform competitors, subject to maintenance of quality and security overall.

During the year that process has included:

• reinforcement of the annual appraisal process introduced in 2005 with specific financial and non-financial goals for executives, and alignment of the remuneration structure to support performance against objectives
• succession planning for a number of key retirements during the period
• recruiting further property professionals to assist the execution of our intensive asset review and management process
• expanding our development team in response to the increased programme activity
• reshaping the Finance & Tax teams following the major restructuring of the Group's internal corporate structure on REIT conversion.

At a time of intense business activity, our staff have responded to the challenges presented by major changes in the composition of our teams.

Our move to a new Head Office is aimed at providing our staff with the modern efficient environment we offer to our customers and we are already reaping the benefits of improved communication and effectiveness at York House.