LandSec Hikes Property Values for the First Time Since Brexit

(Bloomberg) --

The U.K.’s biggest office and retail landlord has reported rising property values for the first-time since the country’s shock Brexit vote more than five years ago.

Land Securities Group Plc posted a 1% gain in the value of its 11 billion pound ($14.8 billion) portfolio in the six months through September after a rebound in the value of some retail and leisure buildings. That’s the first half-yearly gain since just before the 2016 referendum when its combined portfolio was valued at 14.5 billion pounds.

The shares rose as much as 2% in early London trading on Tuesday.

LandSec’s traditional focus on central London offices and regional U.K. shopping malls has been out-of-favor since Brexit, the shift to online shopping and the arrival of coronavirus created a bitter cocktail. The company has pivoted under Mark Allan, who joined as Chief Executive just as the pandemic swept Britain last April. He’s pledged to diversify the company and focus on new mixed-use developments after several years in which the landlord took a cautious approach to new projects. 

The 1% gain was driven by a rebound in the company’s retail park and hotels segments, along with a stable performance from central London offices which make up the bulk of the portfolio. Regional malls and central London stores continued to fall in value but at a slower pace. 

This year, LandSec has been aggressively selling properties and reinvesting funds in its development pipeline, both in and out of London. Earlier this month, the company announced it had agreed terms to buy rival developer U&I Plc, giving it access to a large pipeline of future projects.

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