British Land, long seen by some as a dinosaur of the property industry, last year took a leap into the 21st century.

The company appeared to embrace corporate governance at its most politically correct by splitting the dual role of founder John Ritblat, then chairman and chief executive. The group, which owns Meadowhall shopping centre in Sheffield and the Broadgate office complex in London, passed over Ritblat's talented son Nick to recruit Stephen Hester, former chief operating officer of Abbey National, as its new chief executive.

Analysts will be watching next month's full-year results for any change in policy by Hester, who has so far kept a low profile, refusing to do newspaper interviews.

At November's interim results, Hester praised his new employers and signalled that his approach would be "steady as she goes". Since then British Land has pulled off a few interesting deals, such as the £495 billion (€728 billion) purchase of 23 Debenhams stores.

Few onlookers imagine that the forceful Ritblat has totally given up his grip on British Land, which is renowned as a cunning financial operator rather than a developer. The group was a UK pioneer of using bond markets and recently refinanced £1.6 billion of debt secured against its Broadgate Estate. It replaced the debt with £2.1 billion of new bonds, raising £500 million.

The group has gearing of about 100 per cent, compared with an industry average of 75 per cent. When the investment market is thriving, this helps boost the company's net asset value, the key performance measure of property groups, more than if it had no borrowings. With a huge weight of money chasing property in the last year - from overseas investors, pension funds and others - prices have leapt to a degree that has surprised some observers.

In the past 18 months, analysts at Merrill Lynch and Oriel Securities have upgraded their recommendations on British Land to buy. Robert Fowlds of Merrill Lynch has said that British Land is the "best value among the UK majors". In a recent report, he said: "British Land, being the highest geared of the group, should be the main beneficiary of [further yield shift]."

However, the group's relatively high gearing could exacerbate a share price fall if the market were to enter a downturn. The gearing is one reason why, according to Mike Prew at Citigroup Smith Barney, the company warrants a steeper discount to its net asset value than many of its peers. Its current discount to NAV is 10.94 per cent.

Prew has long been the most outspoken critic of British Land, only recently rerating the company from sell/high risk to hold/high risk and upping his price target from £7.50 to £9.11.

He is cautious because of the group's gearing and its financial structure. This structure could limit British Land's options in a weak property market, according to Prew. Other analysts take a more sanguine view. Many of the biggest property groups on the continent have similar or higher borrowings, says one. In addition, British Land has very long lease lengths, which give it more security than many of its rivals.

ABN Amro has maintained a buy recommendation, while Charles Stanley urges investors to "accumulate". One cause for concern, however, could be the group's low dividend yield of below 2 per cent. British Land's stated policy is to grow its dividend by 8 per cent a year.

UBS recently upgraded its price target for the group to 940p, an 18 per cent discount to expected NAV as of September 2005. But it simultaneously downgraded its rating to neutral. The bank said it viewed British Land's £11 billion portfolio as "well-placed" to enjoy rental growth, but at 940p, the shares would only yield 1.7 per cent.

Morgan Stanley, too, has downgraded the stock amid predictions that the investment property boom will slow later this year. Analysts and investors alike will be all ears at May's annual results presentation for news of rental growth in UK lettings.