Tuesday 10 November 2020 10:40 am

Landsec sinks to £835m loss but backs London's office sector

Commercial real estate owner Landsec sunk to a £835m loss in its half-year results due to the impact of the coronavirus pandemic, but reported strong investor interest in London’s office market. 

Landsec’s share price jumped 7.37 per cent to 690.9p despite mounting losses after the landlord revealed its optimistic outlook on the central London office sector. 

The figures

Landsec reported a loss before tax of £835m in the six months ended 30 September compared to a loss of £147m in 2019.

Revenue profit fell 48.9 per cent to £115m.

Like-for-like net rental income slipped 10.3 per cent, or £31m. 

The landlord reinstated its dividend at 12p, down from a 23.2p per share payout last year. 

Why it’s interesting

Landsec said “investor interest in the London office market remains high”, despite a major shift to remote working during the coronavirus pandemic. 

“Increased occupier demand for high-quality office space with a focus on health and wellbeing is likely to further polarise the market,” the company said. 

What Landsec said

Chief executive Mark Allan said: “The investment market for high-quality London office assets, such as those owned by Landsec, has remained robust throughout the pandemic and there is little sign of that interest waning. 

“Access to this liquidity, coupled with the acquisition and development opportunities that are likely to arise as a result of increased obsolescence of older office stock, as well as the long-term need for urban mixed use regeneration, mean there will be ample opportunity for Landsec to create significant value. 

“We look ahead with a clear strategic direction and are optimistic about the future.”