Land Securities is to unload near a 3rd of its £12.8bn property portfolio, because it seeks to cut back its publicity to struggling sectors equivalent to retail.
Mark Allan, chief govt of the FTSE 100 property firm, introduced it might promote roughly £4bn value of property, 60 per cent of them in London, over the subsequent 4 to 5 years and reinvest in areas of the market the place it may eke out probably the most worth.
The brand new technique entailed “a significant repositioning in direction of a extra centered portfolio with larger progress prospects,” mentioned Mr Allan on Monday. The corporate mentioned it might pull again from sectors through which it has “little or no aggressive benefit”, equivalent to lodges, leisure properties and retail parks.
Any new funding would come after gross sales in these areas, and can be centered on “city alternatives”. That might “definitely embody” city logistics, healthcare and housing developments, mentioned Mr Allan, who additionally hinted that Landsec may put money into retirement housing.
The developer remained dedicated to London, which it described as “one of many world’s gateway cities”, however mentioned it might promote some property to reinvest capital into “new progress alternatives”.
Two-thirds of Landsec’s portfolio by worth is within the UK capital, together with a serious campus in Victoria, the One New Change purchasing centre and workplace improvement close to St Paul’s Cathedral and Deutsche Financial institution’s new workplaces at 21 Moorfields.
Landsec additionally owns leisure and retail websites in London, which Mr Allan mentioned might be developed extra intensively. However the firm would take a cautious strategy to any new improvement whereas coronavirus remained a problem, he added.
Mr Allan took over as chief govt of Landsec in April, having spent near 4 years as head of St Modwen Properties, a FTSE 250 developer. Underneath his management, the corporate centered more and more on logistics and housing — two property sectors which have carried out properly in recent times. St Modwen’s share worth nearly doubled between Mr Allan taking up in late 2016 and the pandemic hitting in March this 12 months.
Landsec, conversely, has been extra uncovered to sectors of the market which have stagnated or declined. On Monday it mentioned it might “reimagine” its retail enterprise, significantly the six regional purchasing centres it owns, which embody the Galleria in Hatfield and the Westgate in Oxford.
Different purchasing centre house owners together with Hammerson are taking a look at repurposing their malls to incorporate housing, lodges and workplaces.
Landsec has been onerous hit by the pandemic, which has thrown retail into turmoil and raised questions on the way forward for workplaces. It collected lower than two-thirds of the £110m lease it was owed by tenants on the newest lease cost date, with retailers paying solely a 3rd of what was owed.
Landsec’s shares have misplaced nearly 50 per cent of their worth since coronavirus broke out within the UK, falling from mid-February highs of £9.96 to £5.24 when the market opened on Monday. That represents a reduction to web asset worth of 56 per cent.
Its share worth rose 2 per cent on Monday morning.