Landsec is pushing ahead with 1 million sq ft of new London property developments as it seeks to offset falling portfolio values bought on by the troubles in the retail sector.
The landlord, which owns shopping centres such as Trinity Leeds and Gunwharf Quays in Portsmouth, wrote down the value of its overall portfolio by £368m for the six months to the end of September.
It said this decline in asset values was driven predominantly by the issues facing retail and leisure, which accounts for roughly half of its portfolio.
Particularly hard hit was the value of its retail park portfolio, which fell 11.1% to £523m, while regional shops and shopping centres fell 9.4% to £1.9bn.
This resulted in a pre-tax loss of £147m for the period, compared to a £42m profit for the same period last year.
Landsec said it had been hit hard by retail administrations and CVAs, which meant like-for-like net rental at shops and centres fall 1.5% to £136m.
However, the instructional landlord said it had made “excellent progress” on its £3bn development pipeline of opportunities in London, highlighting the success of its “flexible office products”, which chief executive Robert Noel said had “landed well with customers”.
Noel added: “We have been proactive in the tough retail market, maintaining high occupancy and protecting income. We have extended our leadership in sustainability by setting further stretching targets and we’ve upped our pace in innovation, introducing better ways to design, construct and manage space.
“With a general election next month and the UK’s proposed exit from the EU further delayed, we remain alert to market risks. However, Landsec enters the next six months with confidence; we’re in a strong financial position, have an exciting development pipeline and are agile enough to seize value-creating opportunities as we see them.”
No comments yet