Landsec reports record London office leasing as it returns to profit
Land Securities has reported record office leasing in London as the lifting of Covid restrictions fuels a return of workers and a surge in demand for prime space, as the property company bounced back to profit last year.
Landsec is one of Britain’s biggest property firms and about 60% of its portfolio is in central London. It reported a pre-tax profit of £875m in the year to the end of March.
The company, which owns offices such as Deutsche Bank’s London headquarters and an office complex near St Paul’s Cathedral, reported a loss of £1.4bn the previous year as the coronavirus pandemic shut down offices across the UK.
“Reports of the demise of office working may have been premature, judging by a return to profit for Land Securities,” said Russ Mould, the investment director at AJ Bell. “Astonishingly in central London the company is seeing record leasing levels. In a competitive jobs market where employers probably want their staff in the office at least some of the time, attractive locations with flexible space are a must.”
Landsec said it intends to cash in on the post-pandemic office space boom by investing £3bn in “sustainable London offices and mixed use development” over the next five years.
The company said that it struck a record £63m of office leases in the past year, on average 4% ahead of valuers’ assumptions. Landsec said office occupancy across its portfolio reached 95.3%, “demonstrating strong demand for high-quality space”.
Landsec’s shopping mall portfolio, which includes Bluewater in Kent and Trinity Leeds, also experienced a return to growth in the second half of its financial year.
Like-for-like retail sales were 1.1% ahead of its 2019/20 financial year and occupancy rose 1.7 percentage points to 93.2%, as
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