Land Securities reported a £147m loss in half-year results to the end of September as the group’s retail portfolio continued to lose value following a raft of insolvencies and retailer collapses.
The group posted a 3.2% fall in net asset value (NAV) per share to 1,298p from 1,341p as its portfolio lost £368m in value to £13.4bn. Total property return was -0.5% and total business return was -1.5%.
While the value of the group’s office portfolio increased 0.3% to £5.9bn, its various retail segments all suffered significant losses. Its London retail assets was down 4.3% to £1.5bn, while regional retail plummeted 9.4% to £1.9bn. Retail parks suffered an even larger loss in value, falling 11.1% to £523m.
Land Securities’ leisure and hotel portfolio was also down, falling 3% to £1.3bn.
Outgoing chief executive Rob Noel said: “The retail market continues to be challenged as retailers adapt to structural change, rising costs and a more cautious consumer, with a number of high-profile company voluntary arrangements and administrations during the period. Limited demand for space and poor investor sentiment is impacting rental and capital values.
“We expect the retail market to remain challenging as it continues to be impacted by structural change, CVAs and administrations. Outlets will continue to be among the best performers in this sector and dominant retail destinations will attract a greater share of retailer demand. We’ll continue to develop plans for repurposing assets where we see opportunity to create value.
“Real estate fundamentals in London are sound. The office market remains in good health and our activities in the capital as a percentage of our portfolio will increase in the coming years – up from 67% today. We have a substantial development pipeline in the capital and will continue to look at further opportunities.”
LAND : Retail woes drag on Land Securities as its records a £147m loss in half year results