Developer expresses intention to become a Real Estate Investment Trust from early 2007 after posting a 32% rise in net asset value this morning.

British Land has revealed its intention to become a Real Estate Investment Trust from early 2007 after posting a 32% rise in net asset value (NAV) in results posted this morning.

The UK's second biggest property developer after Land Securities reported that its NAV, a key indicator for property companies, rose 32% to 1486p per share.

It put the hike down to good performances in out-of-town retail space and prime London rental offices. But it warned that the current strong growth was likely to slow and said that the market was vulnerable to rises in interest rates.

It said: "The property market will pass from its period of 'super-normal' returns and future success will be determined by the ability to add value in a lower growth, more demanding environment."

Like fellow developers Hammerson and Land Securities, British Land plans to convert its property holdings to a tax-efficient REIT early next year. REIT legislation was announced in the Budget in March.