Land Securities delivered positive annual results with EPRA net tangible assets (NTA) increasing 1.7% over the 12 months to 31 March 2025, as real estate values returned to growth.
The valuation of its portfolio was up 1.1% and is now worth £10.9bn. This reflected a return on equity of 6.4% and contributed to an EPRA NTA uplift of 1.7% to 874p per share.
The central London portfolio was up 1.0%, driven by strong 5.2% growth in ERVs, whilst valuation yields rose slightly. Developments were up 2.5% reflecting ERV growth and a de-risking of on-site schemes. The valuation of its major retail portfolio was up 3.4%, reflecting a combination of 4.0% ERV growth and 22 basis point yield compression.
EPRA earnings were up £3m to £374m, reflecting 5.0% like-for-like net rental income growth and lower overhead costs, which more than offset the impact from significant disposals in the year and a rise in finance costs.
EPRA earnings per share was up 0.4% to 50.3p. The company paid a total dividend of 40.4p, up 2.0%.
The group’s balance sheet remains robust, with a long average debt maturity of 9.6 years. Pro-forma for disposals since the year-end, its LTV is 38.4% and average net debt/EBITDA is 7.7 times. The weighted average cost of debt was 3.4% (2024: 3.3%).
The company said that it anticipates a 20% growth in EPRA earnings by 2030, with a 2%-4% growth expected in 2026.
Operational highlights
- 5.0% like-for-like net rental income growth, ahead of guidance, with 8% rental uplifts on relettings/renewals in London and major retail, and continued strong leasing momentum since the year-end
- Increased occupancy by 100 basis points to 97.2%, the highest level in five years
- 4.2% ERV growth
- Reduced overhead costs by 5%, with more than 10% further savings expected over 2026-27
Mark Allan, chief executive, commented:
“Our portfolio again delivered very strong performance with like-for-like net rental income growth of 5.0%, supporting growth in both earnings and portfolio valuation over the year. 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, providing a clear trajectory for further near and medium-term EPS growth.
“Our undoubted portfolio quality is a result of proactive and successful capital recycling over recent years and this will continue to be a focus for us. 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. That is why we have set out a clear plan to increase investment in major retail by a further £1bn and establish a £2bn+ residential platform by 2030, to be funded by rotating £3bn of capital out of offices, non-core investments and low or non-yielding pre-development assets. Delivering on this strategy, whilst continuing to drive sustainable income and EPS growth, is our priority and we are firmly underway.“