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British commercial property company Land Securities Group, also known as Landsec, reported annual results that were ahead of market expectations, supported by strong demand across its office and retail portfolio. The company recorded higher occupancy levels, growth in rental income and better-than-expected property valuations at the end of the financial year. Demand from AI-focused companies also continued to support premium office leasing in London. While Landsec plans to remain cautious on new office developments over the next 18 months, it is looking at retail acquisitions after seeing its strongest retail rental growth in nearly two decades.
British commercial property developer and landlord Land Securities Group reported annual results that exceeded market expectations, helped by strong occupancy levels across its office and retail assets in the UK. Advertisement
The company’s EPRA net tangible assets, which reflect the value of its property portfolio, stood at 882 pence per share at the end of March, slightly ahead of analysts’ estimates of 880 pence per share based on a company-compiled poll.
EPRA earnings per share came in at 51.4 pence, matching expectations. The performance was supported by a 4.6% rise in net rental income during the financial year.
Landsec also reported a 5.5% increase in like-for-like net rental income. Occupancy across its portfolio rose by 100 basis points to 97.7%, marking the company’s highest occupancy level in around 20 years.
The company said continued adoption of artificial intelligence is expected to drive demand for premium office space in central London. At its recently opened Myo King’s Cross office site, nearly 80% of leasing activity came from AI-related or AI-adjacent businesses, showing the growing impact of technology firms on office demand.
Despite improving leasing activity, Landsec said it does not plan to commit significant capital towards new office developments over the next 18 months. The company has instead shifted focus towards retail assets, where rental value growth reached 5.8%, the highest level seen in two decades.
For fiscal year 2027, the company expects like-for-like net rental income growth of around 3% to 5%, while EPRA earnings per share are expected to remain broadly flat year-on-year. Landsec said this is mainly due to the full-year impact of the sale of the Queen Anne’s Mansions office asset.
Looking further ahead, the company forecast high single-digit percentage earnings growth for fiscal year 2028.
Landsec owns and manages office properties in central London along with shopping centres across the UK. Over the past year, the company has also been selling non-core assets as it navigated weaker commercial property valuations and changing market conditions in the UK real estate sector.
The UK commercial real estate market has seen gradual recovery in recent quarters, particularly in prime office and retail segments, as landlords focus more on high-quality assets with stronger tenant demand. Demand for well-located office spaces has remained resilient despite broader concerns around hybrid working trends.
Source Reuters
5th Jun, 2025
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