Landsec, one of the UK’s largest listed landlords, has swung back to profitability, reversing some of the losses incurred during the pandemic as people gradually return to high streets and offices.
The FTSE 100 company posted pre-tax profits of £875mn for the 12 months to the end of March, swinging from a £1.4bn loss the previous year.
That was largely because Landsec’s portfolio of offices and shops increased in value by 11 per cent during the period, from £10.8bn to £12bn, said the company, which published its results on Tuesday morning.
The turnround comes as workers make a tentative return to offices and investors increasingly show a preference for modern, low carbon emitting workplaces.
Around 60 per cent of the company’s portfolio is offices, mostly in London and with relatively strong environmental performance credentials.
But chief executive Mark Allan plans to sell a number of valuable blocks in the capital, raising cash to invest in a development pipeline which is largely in Manchester.
The company made back to back acquisitions in Manchester last year, taking a stake in Media City and buying U+I, a developer with major land holdings there.
Landsec is marketing 21 Moorfields, Deutsche Bank’s new City of London offices, for around £1bn and Allan has said that sale is one of “three or four” London office disposals the company is considering.
The rotation is part of Allan’s strategy to push the company into areas where it can add value either through development or operating buildings. That has involved swapping standing office blocks leased to tenants for a long period for more complex prospects such as shopping centres and large, mixed-use developments.
“We continue to recycle capital out of mature assets, whilst our pipeline now offers the opportunity to invest £3bn in sustainable London offices and mixed-use development over the next five years at attractive returns,” said Allan.