Land Securities upbeat on retail as disposals free capital for growth
Land Securities Group PLC on Tuesday said it is seeing strong demand across its retail and London office portfolios, keeping it on track to hit earnings guidance, as it recycles capital away from low-returning assets.
The London-based commercial property development and investment company is hosting a capital markets event in Liverpool on Tuesday.
It said it remains on course to deliver like-for-like net rental income growth of 3% to 4% and EPRA earnings per share growth of 2% to 4% in the financial year ending March 2026, before the impact of recent disposals amounting to £644 million.
In financial 2025, Land Securities grew net rental income by 5% to £552 million, while EPRA earnings per share edged up 0.4% to 50.3 pence.
In major retail, Landsec said rental uplifts on renewals since May have averaged 13% above previous passing rents, compared to 7% last year. New leases signed and in solicitor’s hands are 12% above estimated rental value, helped by retail sales growth of 8.3% and footfall growth of 4.9%, both ‘well ahead’ of UK averages of 2.0% and 1.0% respectively according to the company. In central London, leasing activity is 9% above ERV.
For central London offices, new leases have been 9% above ERV and renewals 6% above.
The company aims to deliver compound annual net rental income growth of 4.5% to 7% in its major retail portfolio through to financial 2030, adding around 4 pence to 5 pence to EPS at the low end.
On capital allocation, Landsec said it has sold or agreed disposals worth £644 million since March, including the £245 million sale of QAM offices and four retail parks for £261 million. The disposals release capital from assets generating limited or no return, with an effectively neutral EPS impact, the company said.
Landsec said it does not plan to commit ‘meaningful’ capital to new development projects in the near term, prioritising investment in major retail. As a result, its committed development pipeline is expected to fall to about £200 million by mid-2026.
Shares in Land Securities were up 4.1% at 586.00 pence in London on Tuesday morning.
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