Landsec chief executive Mark Allan said the company was well placed to weather the gathering economic storm as it posted a loss before tax of £192m and saw a -2.9% fall in the value of the group’s property portfolio for the half-year ended 30 September 2022.
In the reporting period, Landsec sold £1bn of offices, including the 21 Moorfields development, and reported strong leasing activity across the group’s office and retail assets, with £41m of office lettings completed or in solicitor’s hands and £27m of retail lettings signed or in solicitor’s hands.
“The strategy we launched two years ago was underpinned by two key principles of sustainable value creation: focusing our resources on where we have genuine competitive advantage, and preserving our strong balance sheet,” said Allan.
“At the time, interest rates and property yields were very low, so asset values in many sectors looked expensive. Acting on this, we sold nearly £2bn of mature, low yielding assets while focusing new investment exclusively on opportunities where we saw clear value, or situations which offered long term optionality.
“Our competitive advantages remain our high-quality portfolio, our strong customer relationships, and the ability to unlock complex opportunities through our unique expertise, all of which is evidenced by our strong operational performance in the half year.”
Allan added the business is underpinned by a strong balance sheet, with a “low” 31% LTV, long 9.8-year average debt maturity and no need to refinance any debt until 2026.
“The successful execution of our strategy therefore means we are not only well placed for more challenging market conditions, but also have optionality to take advantage of new opportunities that will no doubt emerge as property markets continue to adjust to a new reality,” he said.
