Landsec posted a loss before tax of £193m for the six-month period ended 30 September following a £375m – 3.6% – fall in the value of its portfolio.
The company recorded a 4.6% reduction in EPRA NTA per share to 893p. Its EPRA EPS was 26.7p, in line with full-year guidance, and its total dividend was up 3.4% to 18.2p per share.
Landsec said office attendance at its buildings increased 10% in the six-month reporting period compared with the previous six months and 27 of the 35 lettings it had completed in the last 12 months had seen occupiers sign for more or the same space.
Mark Allan, chief executive of Landsec, said: “Our high-quality, differentiated portfolio and focused capital allocation mean we continue to benefit from customers concentrating on best-in-class space. In London, our well-located, sustainable offices in vibrant, amenity-rich areas continue to see growing occupancy, growing utilisation, growing customer space requirements and hence growing rents.
“In retail, sales in our locations continue to outperform brands’ overall sales growth, also driving further growth in occupancy and rents. Despite the challenges in the general economic outlook, we see no signs of these trends abating.
“Since early 2022, we have been clear that we expected interest rates to remain higher for longer and that asset values would have to adjust to this new reality, which they have. We were decisive in acting on this view by selling £1.4bn of single-let HQ offices, mostly in the City, at prices ahead of today’s values. Investment activity remains thin, but we expect this to pick up in 2024, which should start to support values for the best assets.
“We will continue to recycle capital where our ability to add further value is limited, but having been a net seller when prices were higher, we are well-placed to take advantage of opportunities that will no doubt arise as the new higher-for-longer reality is now more widely accepted.”
