Landsec does not want more exposure to London, as it struggles to compete against global investment firms.
Chief executive Mark Allan said the company would continue to focus on areas where it will not be competing with the likes of Blackstone and Brookfield, which can raise capital at a much lower cost.
“A frightening amount of capital is going into those vehicles ,” said Allan. “That is a bit of a concern in terms of how competitive or otherwise we can be.”
Since taking over as chief executive in 2020, Allan has established a strategy of selling out of offices in the capital and reinvesting in developments in Manchester, where Allan feels the business can create more value.
“You won’t see us buying a development site in the open market because we can’t compete for that, there is other capital out there that is prepared to accept lower returns,” said Allan.
The change in strategy is an acknowledgment of Landsec’s new place in the hierarchy of UK property investors. From about £10bn in 2015, its market capitalisation has dropped to just under £5.5bn, according to data provider S&P Capital IQ.
“Landsec is a small big company that was acting like a big big company… we need to be more entrepreneurial, more agile, more able to take risks,” said Allan.
