Landsec’s Lucent scheme comprises offices close to the Piccadilly Circus lights
(Picture: Landsec)Land Securities has seen £945 million knocked off the value of its property empire after the pandemic hurt landlords, but its boss said looking ahead there are “reasons to be positive”.
The property giant has suffered in 2020 with office occupation levels much lower since scores of people started working from home in March.
In addition, non-essential retailers, pubs and restaurants had to close sites for months earlier this year for the first lockdown, and they are now shut until next month in line with the government’s latest guidelines. No or less income means a number of tenants have struggled to pay rent, and Landsec has agreed a number of rent holidays or deferrals.
Landsec today said the value of its estate in the six months to September 30 was £11.8 billion, down 7.7% from the prior six months.
It recorded a £835 million loss for the first half, widened from a £147 million loss in the same period in 2019.
Landsec suspended dividend payments in April in order to conserve cash during the virus crisis. It today said over the subsequent six months, it has seen trading conditions, particularly in terms of rent collection and outlook, begin to improve.
It is resuming quarterly dividends commencing with a 12p per share payment in January 2021.
Chief executive Mark Allan said: "As we begin to look beyond Covid-19, I am confident the business is well placed to capitalise on opportunities as they emerge.”
Allan added: “Looking longer term, we believe there are reasons to be positive.”
His firm plans to invest in new projects in London. Allan added that prior to the latest lockdown office occupancy levels had been improving. In the third week of September, its offices were the most full the company had seen the first lockdown.
Landsec’s Allan also pointed to Pfizer’s update yesterday that the drugmaker has made a breakthrough on its Covid 19 vaccine. Allan said that “has to be positive for sentiment on all fronts”.
He said: “The near-term outlook for our business, as for all businesses at the present time, is dominated by Covid-19. The path out of the pandemic - through higher testing volumes, more effective treatments and ultimately a vaccine - is increasingly clear, although the length of that journey and the related economic cost less so.”
Shares in Landsec rose 40.5p, or 6%, to 683.9p.
A number of property bosses, that have seen a turbulent 2020 for the real estate sector, today also welcomed the Pfizer news.
Gerald Kaye, chief executive of Helical, told the Evening Standard: “If the vaccine is approved, that can only be good news for London. This current lockdown is causing unimaginable harm to the retail, food and beverage, travel and hospitality sectors in the vital run up to Christmas. Vaccine or no vaccine we need the capital to get back on its feet without delay for the sake of the whole country and Londoners’ overall well-being.”
Alistair Elliott, group chairman of Knight Frank, said: "It is crucial that Londoners get back to the workplace for the sake of the country and everyone’s individual wellbeing. We cannot afford for 2021 to be a cycle of perpetual lockdowns - therefore anything that prevents this is fantastic news"
