Land Securities has provided an update on its June rental collection in which it has says that after taking into account concessions and deferrals, the net rent due at 24 June was £109m (down from a gross of £122m), of which 60% was paid within five working days. The proportion for the prior yearv was 94% for the equivalent period last year. However, the board says that it intends to reinstate payments following the half-yearly results announcement on 10 November 2020.
Open for business
LandSec says that, in line with government guidance, its shopping centres, outlets and retail parks are now open and are showing “encouraging levels of footfall”. Its office estate remains open and it is seeing early signs of growing occupancy as customers return to work. Construction continues at the company’s development scheme at 21 Moorfields, EC2, and it is progressing the build-to-grade works at our other sites.
Operational summary
- All of LandSec’s office properties have remained open; it continues to work with customers as they plan their returns to its buildings.
- Following the easing of restrictions on non-essential retail in England, Scotland and Wales, all of LandSec’s shopping centres, outlets and retail parks are open. As at 30 June, 79% of the retail units were trading and 16 of LandSec’s 18 leisure parks were open.
- The company’s Accor managed hotels remain closed to the general public, but Accor will phase the opening of the hotels over the next three months.
- In England, for the two-week period since non-essential retail opened on 15 June, footfall in LandSec’s centres was 60% of the level achieved in the equivalent period last year and like-for-like store sales were 80% of the level achieved last year. Over the same two-week period, average transaction values were up 22% compared with last year.
Cash collection and customer support
£122m of rent was due on the 24 June rent payment date. Taking concessions and deferrals into account, the net rent due was £109m. 60% of the net rent due on 24 June was paid within five working days compared with 94% for the equivalent period last year. The table below shows the amount and percentage collected within five days of the due date with a comparison to last year.
| Net rent due on 24 June 2020 | Day 5 amount received | Day 5 amount received |
Day 5 equivalent amount received June 2019 | |
| £m | £m | % | % | |
| Office | 68 | 55 | 81 | 95 |
| Retail | 31 | 9 | 29 | 92 |
| Specialist | 10 | 1 | 10 | 89 |
| Total | 109 | 65 | 60 | 94 |
Of the amount outstanding, £3m relates to customers who have withheld payment pending documentation of agreed concessions.
LandSec says that 75% of rent due on 25 March has now been received (up from the 65% collected after five working days). There was an increase across all segments, particularly in Office, now at 98%. Overall, £30m of rent due on 25 March remains outstanding of which £5m relates to concessions and deferred payments which have subsequently been agreed with customers.
Concesions fund
In March, LandSec established a fund to provide up to £80m of rent relief and, to date, £9m of concessions has been allocated to customers. LandSec says that it continues to have dialogue with its customers and expects to make further allocations of the fund, particularly as the commercial rent moratorium comes to an end. In addition, £4m of deferred payments have been agreed with retail and leisure customers.
Robust balance sheet; dividend to be reinstated
Landsec says that its remains in a financially robust position. At 30 June 2020, its adjusted net debt was £3.92bn compared with £3.93bn at 31 March 2020, pro-forma group LTV was 30.6% using March 2020 valuations (31 March 2020: 30.7%), and it had £1.20bn of cash and available facilities.
LandSec says that its board has reviewed the position on future dividend payments and intends to reinstate payments following the half-yearly results announcement on 10 November 2020. The size and timing of the interim dividend will be confirmed with the publication of the half-yearly results.