Bluewater owner Land Securities swings back to profit
Land Securities returned to profitability last year as occupancy levels across its estate grew to their highest for five years.
The commercial property giant reported pre-tax profits of £393million for the year ending March 2025, compared to a £341million loss in the previous 12 months.
The value of its property portfolio, which includes the Piccadilly Lights and Oxford's Westgate shopping centre, jumped by more than £900million to £10.9billion.
However, Landsec's EPRA net tangible assets - an industry measure that represents the value of its buildings - stood at 874p per share as of the end of March, below forecasts of of 890p.
Like-for-like occupancy rates also tipped up by one percentage point to 97.2 per cent, thanks mainly to strong demand across London offices and major retail outlets.
During the period, clothing retailer Next agreed to triple the size of its store in the Bluewater shopping centre to 133,000 square feet, while Primark doubled its space in Leeds' White Rose Centre to 71,000 square feet.
In addition, cosmetics firm Sephora and Inditex-owned brands Bershka and Pull&Bear opened outlets in Bluewater, and JD Sports launched a large new store in Cardiff's St. David's shopping centre.
Consequently, LandSec's comparable net rental income rose by 5 per cent, although total rental income virtually flatlined at £552million due to significant asset disposals.
LandSec offloaded £496million of non-core asset sales during the last financial year, including a retail park in Taplow for £46million.
The group also sold its entire hotel portfolio to California-based Ares Management for £400million in May 2024 as part of a strategic shift towards the domestic and retail property sectors.
By 2030, the London-listed firm hopes to slash the capital dedicated to its offices by £2billion, boost investment in major retail by an additional £1billion and develop a residential platform worth over £3billion.
Mark Allan, chief executive of LandSec, said: 'Owning the right real estate has never been more important and, with a very healthy pipeline of occupier demand, this trend looks set to continue.
'Our capital allocation decisions from here are about ensuring that the growth outlook for our portfolio in 3-5 years' time is as positive as it is for our current portfolio today.'
Demand for office space in London has gradually improved in the past few years as large employers have pressured their staff to return to the office and stricter environmental regulations have driven a 'flight to quality.'
However, interest rate hikes and the Covid-induced surge in working from home have severely depressed commercial property values.
Land Securities shares were 0.25 per cent lower at 602p on late Friday morning, taking their losses to around 13 per cent over the last year.
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