Values stabilising for Land Securities after difficult year

Land Securities reported an 8.2% reduction in EPRA net tangible assets (NTA) per share to 859p in annual results to 31 March 2024, as the impact of higher interest rates weighed on property valuations.

The group’s portfolio fell 6.0% in the year, which was weighted to the first half of the year. The company said that higher quality asset values had started to stabilise, with investor interest returning to the market.

EPRA earnings per share were fairly stable at 50.1p, as occupancy growth and a 2.8% uplift in like-for-like income offset a rise in interest costs and the impact of asset disposals.

Earnings for the year to 31 March 2025 are expected to be below 50.1p (due to £572m net sales) but will increase in 2026. Total dividend for the year was up 2.6% to 39.6p per share.

LTV reduced to 32.3% (on a pro-forma basis accounting for post year-end disposals).

Mark Allan, chief executive, commented: “Our continued operational outperformance, with rising occupancy and positive rental uplifts in retail and London, is driving robust like-for-like rental income growth and demonstrates the importance of owning and operating the best-in-class real estate. Around 80% of our portfolio is now invested in twelve places with significant scarcity value, where our competitive advantages in shaping and curating these places mean we expect like-for-like rents to continue to grow.

“Following a reset of values over the past two years driven by rising interest rates, the stabilisation in rates and evidence of continued rental growth is starting to attract increased investor interest for the best assets. Around 60% of our portfolio already showed stable values in the second half and overall yields were largely stable in the final quarter, pointing to a positive outlook for our overall return on equity.

“The quality and return prospects of our portfolio are further bolstered by our strong balance sheet. After a period of proactive capital recycling, most recently with over £600m of non-core assets sold in the past seven months, we have meaningful capacity to invest in high quality assets that add to our best-in-class portfolio at what we believe to be an attractive point in the cycle.”