Property group Landsec has posted an improved performance from its ’major retail destinations’ portfolio.
Landsec, owner of shopping centres such as St David’s in Cardiff and Gunwharf Quays in Portsmouth, reported that its new operating model had helped its major retail locations lift like-for-like sales 1.1% last year versus 2019/20, and that occupancy rose 170bps to 93.2%.
Major retail destinations make up 16% of Landsec’s portfolio, with a 60%/40% split between prime shopping centres and outlets.
Landsec said: “Our performance over the past year has made us increasingly confident that the prospects for prime retail destinations are positive, with a growing polarisation between our assets and those facing structural obsolescence.
“We maintain our view there is c25% excess retail space across the UK, but most of this is secondary where vacancy remains high. Inflation is putting further pressure on low-margin stores, which could lead brands to accelerate the rationalisation of the tail-end of their portfolios.
“Conversely, prime destinations are getting stronger. For many leading brands, online and physical channels are now viewed as firmly inter-connected, so we have seen existing brands upsize, new brands opening stores as they move from nearby locations to benefit from higher footfall, and digital-native brands opening physical stores to grow customer connectivity and experience.”
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