The Covid-19 pandemic has pushed Landsec to its biggest annual loss since the global financial crisis, but its chief executive said the company is now entering “the recovery phase” as lockdown restrictions lift.
The FTSE 100 REIT lost almost £1.4bn in the year to the end of March. That marks its fourth consecutive annual loss and its largest since it posted a £4.7bn loss in 2009, at the height of the financial crash.
Revenue profit for the year dropped by 39% to £251m, a level last seen a decade ago. EPRA net tangible assets per share fell by 17.4% to 985p, and the company posted a total business return of -15.9%.
Landsec’s portfolio valuation stood at £10.8bn, down by 13.7% or £1.6bn. The sharpest falls were seen in regional shopping centres and shops (-38%) and London retail (-26.7%). The least affected assets were London offices (-4.3%) and other central London properties (-1.2%).
Chief executive Mark Allan said the results “clearly reflect the challenges caused by both the pandemic and the associated restrictions” but he added that the company is “now entering the recovery phase”.
“Government action to support the economy was swift and the speed of the ongoing vaccination programme impressive,” Allan added. “As a result, there is the real prospect of a strong consumption-led recovery across the remainder of 2021 and 2022. Like many people, I was encouraged to see the relish with which people returned to experience in-person shopping as the easing of lockdown measures began in April, and early indicators are that this excitement is driving a strong return to our retail assets.”
Allan reiterated the new strategy he announced last October, focused on disposals, optimising the London portfolio and refocusing retail assets.
In the capital, he said, recovery is likely to be slower than elsewhere. “Office occupational markets [remain] more subdued for the time being, which could translate into some rental weakness,” he said. “The London investment market, conversely, seems likely to display continued resilience with a significant amount of capital seeking prime investment opportunities and this could go some way to offsetting any rental weakness from a valuation perspective.”
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