Landsec ‘well-placed’ despite slipping to £193m pre-tax loss
The developer/investor behind the Mayfield and MediaCity mixed-use schemes remains confident its strategy leaves the company in a good position to adapt to a changing market.
Landsec today reported a £192m pre-tax loss for the six months ended 30 September 2022, citing a 2.9% drop in its portfolio value amid rising inflation and interest rates.
In the same period last year, Landsec recorded a £275m pre-tax profit.
Meanwhile, the company’s loan-to-value ratio fell from 34% to 31% during the period.
Landsec’s net debt was also down year-on-year – from £4.2bn to £3.4bn – and the company does not need to refinance any of its debt until 2026, according to chief executive Mark Allan.
“The strategy we launched two years ago was underpinned by two key principles of sustainable value creation: focusing our resources on where we have a genuine competitive advantage and preserving our strong balance sheet,” Allan said.
That strategy involved offloading £2bn worth of mature, low-yielding assets, in order to focus on “situations which offered long-term optionality”.
These include Mayfield, where Landsec last week agreed to fund the £400m first phase of the Manchester mixed-use scheme.
“The successful execution of our strategy 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,” Allan said.