Land Securities, the commercial property giant behind the Walkie Talkie skyscraper, today said the impact of last year's Brexit vote on the London office market was not as dramatic as it had expected. However, the UK's largest listed commercial property company expects uncertainty ahead.
Land Securities' "revenue profit", a measure of underlying pre-tax profit that excludes all capital items, stood at £382m in the year to 31 March compared with £362m in 2015-16.
However the developer saw statutory pre-tax profit fall 91 per cent to £112m due to a fall in property prices.
The group proposed a final dividend of 11.7p which increased the dividend for the year by 10.1 per cent.
At the time of writing, shares in the construction giant were down two per cent at 1,117p.
Why it's interesting
Land Securities, which owns swathes of office space in London, may be affected if financial firms decide to move out of London due to Brexit.
However, Land Securities said it is in "robust health" and has "significant capacity and agility" to make acquisitions.
Yesterday, Land Securities' peer British Land said it expects uncertainty in the UK property market as the UK leaves the European Union.
What Land Securities said
Rob Noel, chief executive, Land Securities, said: "In the London office market, we expected the occupational balance to shift from demand to supply during the course of 2017. The Brexit vote brought that inflexion point forward. In last year's report, I said a vote to leave the EU would create business uncertainty, leading to lower occupational demand, falling rental values and a reduction in construction commitments. This is happening, though less than we expected. Overall, the UK economy continued to perform well during the year.
"In the retail market, the effect of the referendum was less clear-cut although, faced with pressure on disposable income, shoppers have started to show more caution. Retailers were a little slower to take up new space during the year but we continued to see opportunities to meet the ever-evolving needs of the most successful brands."