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Losses almost treble for Bluewater owner

Losses at property giant Landsec almost trebled for the year to 31 March, and it predicts “no near-term improvement in retail market conditions, with CVA activity set to continue”.

The Bluewater owner reported a 186% year-on-year growth in losses before tax to £123m, blaming retail “margin pressure” and “weakening [consumer] demand” for a “challenging year”. 

In its financial report, Landsec said: ”Retailers have faced margin pressure from a variety of rising costs, weakening demand and a continuing shift to online. This has led to administrations and company voluntary arrangements (CVAs), the impact of which can be seen in our results. The difficult retail environment has led to a fall in the values of our shopping centres, retail parks and, to a lesser extent, our central London shops.”

Landsec’s valuation deficit dropped to a loss of £557m, down from £91m in the previous financial year. However, revenue grew 8.9% year on year to £442m driven by higher net rental income and reduced costs – most notably interest expense. 

Its combined portfolio is now valued at £13.8bn, down 2.1% from £14.1bn in the previous year.

Chief executive Robert Noel predicted further challenges as the property market continues to be hit by restructurings and company voluntary arrangements (CVAs). 

He said: “We see no near-term improvement in retail market conditions, with CVA activity set to continue. Rental values are likely to decline further in shopping centres and retail parks, though we expect continued rental growth in outlets and select leisure destinations. Consumers will continue to be attracted to destinations that provide a broad range of brands and experiences.”

Landsec will focus on developments in London for the year ahead and beyond. Like-for-like net rental income was up 1.9%, or £10m, thanks to a 7.9%, or £20m, increase for the London portfolio. The retail portfolio recorded a 3.6% – £10m – loss in net rental income compared to the previous year.

Noel added: ”Our activities in London as a percentage of our portfolio will increase in the coming years. Much of our portfolio by value and our entire development pipeline is already in the capital and we are alert to further opportunities. Over time, capital allocated to assets outside London will reduce, but we will maintain our focus on experience-led destinations.”


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