Land Securities said on Tuesday that it swung to a first-half loss, with growth in earnings offset by market yield shift.
In the six months to 30 September, the company swung to a pre-tax loss of £192m from a profit of £275m in the same period a year earlier, as the EPRA net tangible asset per share fell 5% to 1,010p, driven by a decline in the portfolio value. Landsec said a small 0.4% increase in retail valuations was offset by a 4.4% drop in London.
“Whilst our operational performance and growth in earnings were strong, our total accounting return for the period was -2.9%,” Landsec said.
“The material increase in bond yields since March has started to put upward pressure on property yields, principally for those assets where yields were lowest.”
The company said that in the sectors it’s in, this mainly affected London offices, vindicating its decision to sell £1.8bn of mature assets over the past two years.
Chief executive Mark Allan said: “Our competitive advantages remain our high-quality portfolio, our strong customer relationships, and the ability to unlock complex opportunities through our unique expertise, all of which is evidenced by our strong operational performance in the half year.
“Our business remains underpinned by a strong balance sheet, with a low 31% LTV, long 9.8-year average debt maturity and no need to refinance any debt until 2026. The successful execution of our strategy therefore means we are not only well placed for more challenging market conditions, but also have optionality to take advantage of new opportunities that will no doubt emerge as property markets continue to adjust to a new reality.”
