Place strategy

Landsec ‘well placed’ despite £193m pre-tax loss

The developer/investor behind the Mayfield and MediaCity mixed-use programs remains confident that his strategy leaves the company well positioned to adapt to a changing market.

Landsec today announced a pre-tax loss of £192 million for the six months to September 30, 2022, citing a 2.9% decline in the value of its portfolio amid rising inflation and rising interest rate.

In the same period last year, Landsec recorded a pre-tax profit of £275m.

Meanwhile, the company’s loan-to-value ratio fell from 34% to 31% during the period.

Landsec’s net debt has also fallen year-on-year – from £4.2bn to £3.4bn – and the company does not need to refinance its debt until 2026, according to General Manager Mark Allan.

“The strategy we launched two years ago was based on two key principles of creating sustainable value: focusing our resources where we have a real competitive advantage and preserving our strong balance sheet,” Allan said.

That strategy involved offloading £2bn worth of mature, low-yielding assets, to focus on “situations that offered a long-term option”.

These include Mayfield, where Landsec last week agreed to fund the £400million first phase of Manchester’s mixed-use scheme.

“The successful execution of our strategy means that we are not only well positioned to weather tougher market conditions, but also have the ability to take advantage of new opportunities that will no doubt emerge as real estate markets will continue to adapt to a new reality,” Allan said.