REG - Land Sec. Group PLC - Landsec hosts capital markets event in Liverpool

Land SecuritiesAnnouncement

23/09/2025 07:00

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RNS Number : 3343A  Land Securities Group PLC  23 September 2025

23 September 2025

Land Securities Group PLC

("Landsec")

 

 

Landsec hosts capital markets event in Liverpool

Landsec ("the Company") will host a capital markets events at Liverpool ONE
today, where it will provide an update on current trading and share further
insight into how the attractive growth across its major retail platform is
expected to contribute to the Company's EPS growth, both in the short and for
the longer term.

Continued strength in operational performance

Since its FY results in May, Landsec has seen good momentum on its primary
financial objective of delivering sustainable income and EPS growth. This is
underpinned by the ongoing strength in occupational demand across its
high-quality central London and major retail portfolios, as the focus from
customers on the best quality space remains unabated.

This has been particularly pronounced in major retail, where leases signed and
in solicitor's hands for the year to date are on average 12% above ERV. Rental
uplifts on relettings/renewals continue to grow relative to previous passing
rent, up to 13% for the year to date, compared to 7% for FY25 and 1% for FY24.
This is underpinned by strong growth in retail sales, which at 8.3% over the
five months to August was materially ahead of the national average of 2.0%,
and strong growth in footfall, which at 4.9% was also well ahead of the UK
average of 1.0%.

In central London, leasing remains robust as well, with leases signed and in
solicitor's hand 9% above ERV and relettings/renewals 6% above previous
passing rent. As such, Landsec is firmly on track vs its guidance of c. 3-4%
growth in like-for-like net rental income and c. 2-4% growth in EPRA EPS this
year, before the 0.9 pence impact on this year's EPS from the disposal of QAM.

Significant income growth potential in major retail

With a continued focus from brands on the best destinations which deliver the
highest sales and its market-leading platform, Landsec today will share
further insight into how it targets to deliver 4.5-7% CAGR in net rental
income from its existing major retail portfolio by FY30.

This includes 3-4% growth p.a. from capturing the growing reversionary
potential across its high quality portfolio and growth in turnover income.
Growth in commercialisation income, such as digital media, events, brand
activations and EV charging,  is expected to add 0.5-1% p.a. In addition, the
investment in up to c. £200m of smaller, high-yielding capex projects is
expected to add on average 1-2% of growth p.a.

Taking into account interest cost on future capex, this means that at the low
end of the target CAGR above, Landsec's existing major retail platform would
add c. 4-5p to EPS by FY30, which is what is reflected in the c. 60p potential
FY30 EPS the Company has pointed to.

Capital allocation

Focusing on sustainable income and EPS growth, and maintaining a strong
capital base, Landsec has made good progress in capital recycling, with £644m
of low-returning assets sold or in legals since March, principally comprising:

-      The sale of the QAM offices for £245m, which generated a total
return of c. 0%, as the valuation depreciates in line with the income received
until the 2026/28 lease expiries;

-      The sale of a small £50m City office, which generated a net
income yield of 5.1%;

-      The disposal of four retail parks for £261m, one of which is in
legals, which generated a slightly higher income return of 6.4% but delivered
little LFL income growth;

-      The sale of two pre-development assets for £72m, one of which is
in legals, which generated a -0.4% net income yield.

Combined, these disposals will release £644m of capital from assets which
generated limited or no return at a cost to overall NTA of 1.0%. Aside from
the aforementioned impact of turning the residual QAM finance lease income
into a capital receipt on selling the asset, the aggregate impact of these
disposals is effectively neutral in terms of EPS.

Investment activity in London offices is gradually recovering from a low base
as ERVs continue to grow. Having sold £295m of offices well ahead of
schedule, Landsec intends to accelerate further capital recycling over the
next 12-18 months, to reinvest in major retail. Given the superior income
returns and attractive growth in income, this remains Landsec's highest
conviction call, so in prioritising its capital allocation, the Company does
not plan to commit any meaningful capital  to new development projects in the
near term. As a result, its committed development pipeline is expected to
reduce to c. £0.2bn by mid-2026.

The presentation of today's capital markets event will be made available on
the Company's website later today.

Ends

 

About Landsec

We identify and shape places that create opportunity, enhance quality of life,
and bring joy to the people connected to them.

This is how we've created the UK's leading portfolio of urban places and one
of the largest real estate companies in Europe.

Our £10 billion portfolio is built around premium workplaces, the country's
pre-eminent retail platform, and a residential pipeline that will redefine
urban life.

We've honed this ability over 80 years. Spotting the opportunities, building
the partnerships, and continually adapting to shape the places that meet the
needs of a changing world.

Places where life happens. Where businesses grow. And where cities are
defined.

 

Find out more at Landsec.com

 

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