Latest news with #LandSecurities
Time of India
17-05-2025
- Business
- Time of India
UK's Landsec's property valuations miss expectations, bets on retail growth
BENGALURU: Land Securities ' overall annual property valuations slightly missed expectations on Friday, and the British commercial landlord said it plans to invest more in retail properties as store chains are expanding in premium locations. The company has been shedding non-core assets as growth in office space remains weaker in comparison to retail and residential counterparts after the pandemic. CEO Mark Allan called the company's retail segment the "strongest performing part" of its portfolio, and said he expects the firm to benefit from retailers renting space in premium shopping centres and malls. "Retailers have to be in locations where consumers are spending money and that's what's driving the trend for fewer, better, bigger stores in the very best locations that has been underway for some time now," Allan said in a media call. Landsec plans to invest more in its retail and residential property assets over the next few years, and recently acquired one of the UK's premier shopping centres, Liverpool ONE. Landsec's EPRA net tangible assets - an industry measure that represents the value of its buildings - stood at 874 pence per share as of the end of March, below expectations of 890 pence, as per a company-compiled poll. Its shares were down 1.7% by 0849 GMT. Analysts at JPMorgan said that while the company is growing, the brokerage expects some low single digit percentage adjustments down in market expectations for fiscal 2026 following the small miss in property valuations. Landsec expects rental values for office properties to continue to grow at a broadly similar rate this year as they did last, citing "modest" supply across London. Pre-tax profit for the year ended March 31 came to 393 million pounds ($523.8 million), compared to a loss of 341 million pounds last year.
Yahoo
17-05-2025
- Business
- Yahoo
Land Securities Group PLC (LDSCY) (FY 2025) Earnings Call Highlights: Strong Operational ...
EPS Growth: Expected 20% growth in EPS over the next five years, with a 2% to 4% increase anticipated for the current year. Like-for-Like Income Growth: Overall growth of 5% for the year, with retail and London sectors rising to 8%. Occupancy Rate: Increased by 100 basis points to 97.2%. Net Debt-to-EBITDA: 7.7 times, with a target of less than 8 times. Loan to Value (LTV): Just over 38%, with a target to reduce to the mid-30s. Dividend Growth: Increased by 2%, in line with guidance. Return on Equity: Positive at 6.4%. Net Tangible Asset (NTA) per Share: Up 1.7%. ERV Growth: 4.2% growth driven by strong leasing activity. Capital Investment: Over GBP600 million invested in retail destinations, with GBP655 million in asset sales. Overhead Cost Reduction: Down 5% for the year, with a further reduction target of 10% over the next two years. Warning! GuruFocus has detected 6 Warning Signs with LDSCY. Release Date: May 16, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Land Securities Group PLC (LDSCY) reported strong operational performance with high like-for-like income growth across both London and retail, which make up 83% of their business. The company expects to drive around 20% growth in EPS over the next five years, despite a 10% EPS headwind from rising interest costs. Occupancy rates increased by 100 basis points to 97.2%, indicating strong demand for their properties. Land Securities Group PLC (LDSCY) invested over GBP600 million into prime retail destinations, Liverpool One and Bluewater, at highly accretive yields. The company has a clear strategy to deliver sustainable income and EPS growth, with a focus on high-quality assets and efficiency savings. Rising interest costs and a finance lease expiry at Quam are expected to create a 10% EPS headwind. Net debt increased due to acquisitions, with LTV now just over 38%, which is higher than their target of mid-30s. The company faces challenges in maintaining EPS growth due to the time required to shift their portfolio mix. There is a risk of cost overruns and slippage in completion dates for under-construction developments. The mixed-use assets segment saw a 5% decrease in value, partly due to predevelopment CapEx not yet reflected in valuation uplifts. Q: What are the key factors needed to achieve the 2030 EPS growth target, and what risks could prevent reaching it? A: Mark Allan, CEO, explained that most growth will come from the current portfolio, focusing on capturing reversion in the office portfolio and rental growth in retail. Cost efficiencies, largely technology-driven, are also crucial. Towards the end of the period, capital recycling will play a role, assuming a recovery in investor demand for office assets. Q: What are the expected returns on residential developments, and how do they compare to stabilized yields in the market? A: Mark Allan noted that residential projects are expected to yield a net return in the low 5% range, depending on location. Stabilized yields currently range from 4.25% to 4.75%. The strong correlation of rental growth to inflation and political support for housing development are key factors supporting these projects. Q: Has there been any change in the expected completion dates for under-construction developments? A: Mark Allan confirmed that the projects are expected to complete around the end of the financial year, with some slippage from initial timelines. Timber Square is likely to see pre-let demand sooner, while 30 high will attract interest closer to completion. Q: How is the retail investment market evolving, and what are the plans for the GBP1 billion investment in retail over the next three years? A: Mark Allan stated that GBP200 million will be invested in expanding existing retail spaces, with the remaining GBP800 million likely involving two acquisitions. The focus is on top-tier shopping centers, with limited new supply supporting investment prospects. Q: What impact do potential disposals have on overheads, and how does the market respond to Landsec's strategic intentions? A: Mark Allan indicated that overheads are not significantly impacted by disposals, as cost reductions are driven by technology investments. The market has shown positive interest in Landsec's strategic plans, with various options for participation, including joint ventures and direct investments. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Daily Mail
16-05-2025
- Business
- Daily Mail
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.
Business Mayor
16-05-2025
- Business
- Business Mayor
Landsec says London office rents rising quickly as it plots £2bn in sales
Unlock the Editor's Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Commercial landlord Land Securities says London office rents are rising quickly, with property valuations steady, as it prepares to sell £2bn of office blocks to fund a pivot into residential property. The FTSE 100 landlord reported net rental income growth of 6.6 per cent in the year to March, on a like-for-like basis, across its £6.7bn central London portfolio of mostly City and West End offices. 'In London, office utilisation across our portfolio continues to grow,' Landsec chief executive Mark Allan said. 'In the near future, new supply across London is modest, so we expect our rental values this year to continue to grow at a broadly similar rate.' Allan faces a daunting task to sell about £2bn of office blocks over five years to generate cash to buy and build thousands of homes, which he sees as a more attractive investment generating steady income. He said he expected these sales to start in 2026. Office dealmaking remains at the lowest level since the global financial crisis, with very little liquidity for blocks worth more than £100mn. Deal volumes fell 18 per cent across Europe in the first quarter, according to data group MSCI, as a recovery in the wider commercial property transaction market stalled. Investors have been wary of buying office buildings since the pandemic and the rise of hybrid working, while the post-Covid rise in interest rates slashed property values across the sector. 'Offices are in an investment market trading vacuum [above] £100mn, so portfolio valuations are more subjective,' Jefferies analyst Mike Prew said in a note ahead of Landsec's report. He warned that the pivot into residential 'could be slow to execute organically'. Landsec share were down about 2 per cent in early London trading. Allan cited recent joint venture deals by Norway's oil fund with Grosvenor and Shaftesbury Capital as examples of investors looking to 'acquire really scarce real estate in central London at a really attractive point in the cycle if you look at it on a long-term basis'. Landsec said its £10.9bn portfolio, which also includes major shopping centres and a mix of other properties, increased in value by 1.1 per cent in the year to March, according to an independent valuation. This continues a slow improvement in property values after a brutal two years during which prices fell about 25 per cent on average across Europe, according to Green Street analysts. Allan is also making a big bet on the top tier of shopping centres — with large deals at Liverpool One and Bluewater last year. He argues these properties have strong demand from retailers but no new construction. Landsec swung from a loss of £341mn in 2024 to a pre-tax profit of £393mn in 2025, driven by the rising property valuations.
Reuters
16-05-2025
- Business
- Reuters
UK's Landsec's property valuations miss expectations, bets on retail growth
May 16 (Reuters) - Land Securities' (LAND.L), opens new tab overall annual property valuations slightly missed expectations on Friday, and the British commercial landlord said it plans to invest more in retail properties as store chains are expanding in premium locations. The company has been shedding non-core assets as growth in office space remains weaker in comparison to retail and residential counterparts after the pandemic. CEO Mark Allan called the company's retail segment the "strongest performing part" of its portfolio, and said he expects the firm to benefit from retailers renting space in premium shopping centres and malls. "Retailers have to be in locations where consumers are spending money and that's what's driving the trend for fewer, better, bigger stores in the very best locations that has been underway for some time now," Allan said in a media call. Landsec plans to invest more in its retail and residential property assets over the next few years, and recently acquired one of the UK's premier shopping centres, Liverpool ONE. Landsec's EPRA net tangible assets - an industry measure that represents the value of its buildings - stood at 874 pence per share as of the end of March, below expectations of 890 pence, as per a company-compiled poll. Its shares were down 1.7% by 0849 GMT. Analysts at JPMorgan said that while the company is growing, the brokerage expects some low single digit percentage adjustments down in market expectations for fiscal 2026 following the small miss in property valuations. Landsec expects rental values for office properties to continue to grow at a broadly similar rate this year as they did last, citing "modest" supply across London. Pre-tax profit for the year ended March 31 came to 393 million pounds ($523.8 million), compared to a loss of 341 million pounds last year. ($1 = 0.7519 pounds)
