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LandSec slides to £147mln loss as property values subside

The FTSE 100 landlord's properties shed 2.8% or £368m of their value, thanks to tough times for high street retailers

Land Securities -
The company's retail parks were worst hit, losing 11% of their value

Real estate investment trust Land Securities Group PLC (LON:LAND) swung to a loss in the first half of the year, as its retail properties struggle to keep their value.

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.

READ: Land Securities' chief executive Robert Noel to quit next year

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.

Quick facts: Land Securities

Price: 953.2 GBX

Market: LSE
Market Cap: £7.06 billion

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