Half time profits have rocketed 66 per cent for British Land - owner of Solihull's highly successful Blythe Valley Business Park.

The group yesterday said headline pretax profits for the six months to September 30 - which under the new IFRS accountancy standard allows gains on asset disposals and revaluations to be put through the profit and loss account - climbed to £777 million.

On an underlying basis, pretax profits were up 42 per cent to £102 million, while net rental income rose 30 per cent to £351 million. Net assets were up by 11.3 per cent to £12.56 a share - well ahead of analysts' expectations.

British Land also unveiled plans to build a new 35-story office tower in the City of London in anticipation of a bounce-back in demand for prime office space there over the next few years.

The property group, which already operates the successful Bishopsgate complex in the Square Mile, is planning to build the 822,000 sq ft 201 Bishopsgate Tower by 2008 and is confident that increasing demand for prime City offices will enable it to secure higher rents on the building.

City office rents currently average around £ 48 per square foot, but are predicted to rise to £60 by 2008 and up to £70 per square foot by 2010.

" We are expecting a bounce-back in City rents over the next few years, but even assuming no increase in rental growth we are confident we can optimise profits from this new development," said British Land's chief executive, Stephen Hester.

Apart from the new Bishopsgate Tower, British Land is also engaged on new City office developments at Lime Street, Leadenhall Street and Ludgate West.

Overall, the group's total development programme, which also includes new West End buildings, extends to over six million square feet.

Mr Hester said that while the wider retail sector was experiencing difficulties, British Land was not affected, as a lot of its retail assets - comprising 57 per cent of its total portfolio - were in the form of retail parks, where growth remained strong.

Indeed, the value of British Land's retail assets rose 4.3 per cent during the half year, with shopping centres up 4.2 per cent and superstores ahead 5.4 per cent. Its City of London office assets rose six per cent in value.

Mr Hester took charge last year and has since sought to shake up the asset portfolio.