Last updated 17th June 2022
Landsec Group Plc
Landsec Group Plc is the largest commercial property company in the UK and a significant player in the central London office market and a significant owner of major retail destinations and developer of mixed-use urban regeneration schemes. A FTSE 100 member, the group has a commercial property portfolio worth around £12 billion with around 24 million sq ft of property in retail, leisure, workspace and residential hubs.
Around 65% of Landsec’s portfolio is in central London, much of it in the West End, the City and Southwark. Around half of its £7.8 bn of central London office portfolio has been developed over the past ten years. The 5.8 million sq ft portfolio includes landmark schemes such as Picadilly Lights and Victoria.
Landsec”s £1.9 bn portfolio of major retail destinations covers 8.1 million sq ft of space and includes major schemes such as White Rose in Leeds, Westgate Oxford, Trinity Leeds, Gunwharf Quays in Portsmouth, St David”s in Cardiff and a 38.75% stake in Bluewater Shopping Centre, near the M25.
Meanwhile the group also has a portfolio of 3 million sq ft of mixed-use urban neighbourhoods, valued at £0.49 billion, in a sector where it is expanding and has a potential cap-ex of £1.5 billion over the next five years. A further £1.5 billion of other ‘subscale’ assets such as hotels, retail parks have been earmarked for disposal.
Meanwhile, in late 2021, the group created a new £135m net zero transition investment plan for its portfolio.
Financial results in late spring 2022 (see below) showed that the group has seen record leasing in its London office portfolio, a return to growth in its major retail destinations and progress in growing its mixed-use urban neighbourhood portfolio. Meanwhile, Landsec has a £3bn pipeline which it is looking to invest in London offices and mixed-use development over the next five years.
In May 2022, chief executive Mark Allan said: “With the expertise we have within the business and the momentum built, I am confident that we are on the right path and will be able to navigate the wider macro uncertainties facing the economy today.”
Financials
To view the financials for Land Securities plc, visit Companies House and use Company ID 04369054.
Land Securities remains in good financial health and produced strong results for the year to end-March 2022. EPRS earnings rose to £355 million from £251 million previously and the group reported a pre-tax profit of £875 million, compared to a loss of £1,393 million previously. Meanwhile, net assets per share rose to 1070p from 975p and the group said it had a strong balance sheet with only 18% of drawn debt maturing in the next three years. Net debt rose to £4.16 billion, up from £3.486 billion.
Developments
Central London offices
Encouraged by record levels of leasing, Landsec is set to deliver a £1.2bn committed pipeline between this coming October and June 2023. It has 507,000 sq ft of potential new schemes at New Street Square and in Southwark which increase its potential future pipeline to 1.8m sq ft. Meanwhile, the group says it has the flexibility to start up to three new projects with a development cost of some £1bn.
In late spring 2022, Landsec topped out its Piccadilly Lights scheme in the West End which will provide 110,000 sq ft of prime office space and is due for completion in the fourth quarter of 2023.
Meanwhile in late spring 2022, Landsec secured 100% ownership of The Liberty of Southwark, a public-private partnership with Transport for London which will provide more than 160,000 sq ft of new office space, plus shops, restaurants, cafes, business workspace and new homes. The scheme will join Landsec’s existing Southwark pipeline which include schemes at The Forge, Red Lion Court and Timber Square.
Mixed-use urban neighbourhoods
Two key acquisitions in late 2021 have boosted growth prospects in the group’s mixed-use regeneration business: MediaCity in Greater Manchester and U+I London. Both have planning consent and provide scope for the group to invest £800m-£900m in residential, work and leisure space on new schemes over the next five years.
The £269 million purchase of U+I gives Landsec five mixed-use projects in London, Manchester and Cambridge, where it could invest c. £400-600m in the next five years. Meanwhile, the 75% stake it has acquired in MediaCity offers the potential for around £400m of mixed-use development. In all, the two acquisitions have grown Lansec’s mixed-use pipeline by around 50% to around £4bn; of this it plans to invest some £1.5bn over the next five years
Following the U+I acquisition, Landsec recently created a new regeneration-focused business to focus on mixed-use urban neighbourhoods and partly to build a pipeline of new schemes.
In summer 2022, the group was preparing to start work on the first phases of a mixed use development at Mayfield, Manchester later in 2022 and at MediaCity.
The group submitted a major planning application for its O2 Centre Masterplan Site to Camden Council in early 2022 for a mixed-use development of 1,800 new homes in Finchley Road where it hopes to start work in 2023.
On the retail front Landsec recently launched a new product for retail and hospitality brands which involves flexible lease options, lower initial capex requirements and which should appeal to smaller retailers, independents and digital natives.
Glenigan Data
Glenigan data points to a busy development workload at Landsec. It shows plans have been granted and contracts awarded for a £7 million conversion project on an ‘art simulation experience’ at 1 New Change in the City of London where Archetypely is the main contractor and work is set to start in late summer 2022 and run for 16 months (Project ID: 21515120). Meanwhile, Landsec is a client on a £2.85 million Creative Hub conversion project at Lewisham High Street in south east London where detailed plans have been submitted and work is set to start in late 2022 and run for six months (Project ID: 21570122)
Conclusion: Major opportunities across a significant pipeline
Having been in business since 1944, Land Securities has weathered more than a few economic cycles and after the upheaval of recent years, it appears to be in good shape to take advantage of emerging trends in the property sector. The group’s focus on its central London portfolio, its major retail destinations and its major mixed-use urban regeneration schemes all bode well for its prospects over coming years. Rising interest rates may put something of a dampener on its commercial property and retail business in the immediate future, but Landsec has some significant opportunities across its pipeline – particularly for mixed-use urban schemes – which should mean it maintains a significant development programme.
How to win work with Land Securities
As it works chiefly on large projects – both in in-town and on brownfield sites, Land Securities works with various major contractors including : Bovis Lend Lease, McAlpine, Skanska, Mace and HBG.
Full details on the group’s policy on suppliers and the selection can be seen on the group’s website here
Key contacts:
Ian Maris, Head of Procurement and Contracts at Landsec
Email: Ian.Maris@landsecurities.com
Tel: 0207 413 9000
Ian Burr, Head of Property Management
Email ian.burr@landsec.com
Tel: 020 7413 9000