Landsec reports record London office leasing as it returns to profit

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Land Securities has reported grounds bureau leasing successful London arsenic the lifting of Covid restrictions fuels a return of workers and a surge successful request for premier space, arsenic the spot institution bounced backmost to nett past year.

Landsec is 1 of Britain’s biggest spot firms and astir 60% of its portfolio is successful cardinal London. It reported a pre-tax nett of £875m successful the twelvemonth to the extremity of March.

The company, which owns offices specified arsenic Deutsche Bank’s London office and an bureau analyzable adjacent St Paul’s Cathedral, reported a nonaccomplishment of £1.4bn the erstwhile twelvemonth arsenic the coronavirus pandemic unopen down offices crossed the UK.

“Reports of the demise of bureau moving whitethorn person been premature, judging by a instrumentality to nett for Land Securities,” said Russ Mould, the concern manager astatine AJ Bell. “Astonishingly successful cardinal London the institution is seeing grounds leasing levels. In a competitory jobs marketplace wherever employers astir apt privation their unit successful the bureau astatine slightest immoderate of the time, charismatic locations with flexible abstraction are a must.”

Landsec said it intends to currency successful connected the post-pandemic bureau abstraction roar by investing £3bn successful “sustainable London offices and mixed usage development” implicit the adjacent 5 years.

The institution said that it struck a grounds £63m of bureau leases successful the past year, connected mean 4% up of valuers’ assumptions. Landsec said bureau occupancy crossed its portfolio reached 95.3%, “demonstrating beardown request for high-quality space”.

Landsec’s buying promenade portfolio, which includes Bluewater successful Kent and Trinity Leeds, besides experienced a instrumentality to maturation successful the 2nd fractional of its fiscal year.

Like-for-like retail income were 1.1% up of its 2019/20 fiscal twelvemonth and occupancy roseate 1.7 percent points to 93.2%, arsenic retailers hoped to instrumentality vantage of shoppers returning to malls. Landsec, which paid £126m for an further 18.75% involvement successful Bluewater and £426m for a 75% involvement successful MediaCityUK successful Greater Manchester during the year, said that it signed, oregon is processing, £29m of lettings deals for retail space.

“There has been a betterment successful Landsec’s retail locations excessively arsenic restrictions ease, with the landlord putting effort successful making these charismatic destinations for shoppers,” Mould said. “Occupancy rates are besides up – though this betterment could beryllium chopped abbreviated arsenic households chopped backmost connected spending amid outgo of surviving pressures.”

Landsec’s portfolio of offices and shops accrued successful worth by 11% twelvemonth connected year, from £10.8bn to £12bn.

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“Landsec has delivered beardown operational and fiscal results contempt the turbulence wrong the UK economy,” the LandSec main executive, Mark Allan, said. “The actions we person taken, driven by our strategical absorption connected 3 chiseled areas person resulted successful grounds leasing successful our London bureau portfolio, a instrumentality to maturation successful our large retail destinations and clear, substantive advancement successful increasing our mixed-use municipality neighbourhood portfolio.”

Landsec hopes to merchantability 21 Moorfields, Deutsche Bank’s caller City of London offices, for astir £1bn and Allan said that merchantability is 1 of “three oregon four” London bureau disposals helium is considering.

“We proceed to recycle superior retired of mature assets, portion our pipeline present offers the accidental to put £3bn successful sustainable London offices and mixed-use improvement implicit the adjacent 5 years astatine charismatic returns,” helium said.

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