The FTSE 100 firm revealed on Tuesday that it lost £147mln before tax in the six months to 30 September, compared with a £42m profit for the same period in the prior year, because of a black hole in the value of its assets.
There was a 2.8% decline in the value to £13.4bn of the total portfolio of retail outlets and office assets, led by a steep 11% drop in its retail parks, and regional retail which declined 9% because of the ongoing high street blues.
Confirming the high street gloom that had been foreshadowed by retail landlord Intu Properties PLC (LON:INTU) last week, LandSec said the retail market remains “challenging” as retailers “adapt to structural change, rising costs and a more cautious consumer, with a number of high-profile company voluntary arrangements (CVAs) and administrations”.
CVAs are a measure employed by troubled retailers that allows them to redraw contracts in a bid to stay afloat.
With property markets expected to stay tough, LandSec is working to repurpose its assets, and has a £3bn pipeline of mostly London office-led schemes including Piccadilly Lights and Red Lion Court, and new properties Portland House and Lavington Street to be developed next year.
A £2mln increase in net rent from its growing office division saw group revenue profits grow 0.4% to £225mln.
The company announced a quarterly dividend of 11.6p per share, representing a 2.7% increase in its first half dividend to 23.2p per share.