One of the UK’s biggest commercial landlords has revealed it plunged to a £1.4 billion annual loss as lockdowns left many of its properties lying empty and hammered rent collections.
Land Securities – also known as Landsec – saw losses for the 12 months to March 31 widen sharply from £837 million the previous year after like-for-like rental income across its London-focused properties plunged 30.4%.
Restrictions and stay at home measures meant the “vast majority” of its portfolio was either closed or largely left unoccupied for more than half of the year, according to the group.
Landsec saw the value of its combined portfolio across offices, retail and leisure tumble 13.7% to £10.8 billion.
It insisted it was now in the “recovery phase” as lockdown restrictions have lifted for shops and hospitality, with some workers also beginning to return to offices.
The group hiked its full-year revenues to 27p a share, up from 23.2p in 2020, in a sign of confidence in the outlook.
But it admitted that so-called hybrid working – combining remote and office working – is “here to stay” and said the impact on commercial property demand remains “far from clear and will not be uniform”.
It said demand was likely to remain strong for prime locations, but that this trend was set to hit rents in secondary sites – of which it has “very little” exposure.
Mark Allan – chief executive of Landsec, who took the helm in the early days of the Covid-19 crisis last April – said: “We are now entering the recovery phase.
“Government action to support the economy was swift and the speed of the ongoing vaccination programme impressive.
“As a result, there is the real prospect of a strong consumption-led recovery across the remainder of 2021 and 2022.”
Last month’s reopening of non-essential retail and outdoor hospitality has driven a strong recovery for its retail sites and the group added it expects to see “even more” from this week’s further easing of measures.