Commercial property giant Land Securities, whose portfolio of assets include the St David’s Shopping Centre in Cardiff, has returned to an annual profit after benefiting from rising rents and retail chains investing in their biggest shops.
The company shrugged off any impact of US tariffs on business investment. Land Securities (Landsec) reported a pre-tax profit of £393m for the year to the end of March, rebounding from a loss of £341m the year prior.
The total value of its property portfolio jumped to £10.88bn, from £9.96bn this time last year.
Landsec’s portfolio also includes office space, retail destinations and landmarks such as the White Rose shopping centre in Leeds, the Bluewater shopping centre in Kent, and the Piccadilly Lights in London.
The London-listed company said demand for “modern, sustainable office space” in London remained strong, and that brands continue to focus on “fewer, but bigger and better stores in key locations”.
“As supply of both is constrained, rents in our portfolio continue to grow,” it told investor
For example, it pointed to fashion chain Next tripling the size of its Bluewater store, Primark doubling the size of its shop in White Rose, and new openings in shopping centres such as Bershka, Pull&Bear, and JD Sports, which it said is investing in a major new store at St David’s Shopping Centre in a relocation from elsewhere in the centre of Cardiff. St David’s provides 1.4 million sq ft of retail space.
The top 1% of all shopping destinations in the Ƶ provide brands with access to 30% of all retail spending in stores, according to Landsec, which said that nearly 90% of its retail assets were in that top bracket.
The company plans to ramp up investment in popular retail destinations by £1bn over the next one to three years.
It told investors that if brands were feeling squeezed by higher national insurance contributions, or wider economic uncertainty, then that would serve to sharpen the focus on their best stores – and “put more pressure on the tail-end” of their chains.
Furthermore, it said uncertainty caused by Donald Trump’s new tariffs on US imports was not yet having any noticeable impact on demand among its customers or on the investment market.
“Owning the right real estate has never been more important and, with a very healthy pipeline of occupier demand, this trend looks set to continue,” chief executive Mark Allan said.
