Landsec slashes value of property assets by £323m

ONE of Britain’s biggest commercial landlords has written down the value of its assets by more than £300m as rising interest rates hit property prices in London.

Landsec cut the valuation of its portfolio by £323m to £10.9bn in the six months to the end of September, blaming the falling price tag of its London properties.

The value of its buildings in the City of London and the West End fell by 9.7pc and 4.2pc respectively.

The company owns properties such as the One New Change shopping centre and office complex opposite St Paul’s Cathedral, and the Dominion Theatre on Tottenham Court Road.

Landsec’s half-year profits slumped in response, dropping to £192m compared with £275m in 2021.

Mark Allan, the chief executive, blamed the drop on rising interest rates, which he said would “have a lasting impact on asset values, be it equities, bonds or real estate”.

The company has sold £2bn of property since 2020 and aims to sell off a further £2bn, but said it is likely to slow the pace of disposals in the face of an uncertain economy.

Retail performed well as shoppers returned to in-person shopping rather than purchasing online.

Mr Allan said: “There is tangible demand for space in shopping centres as the online shopping trend has fallen back.” Sales across its retail properties, which account for 18pc of its portfolio and include the Bluewater shopping centre in Kent, rose by 6.3pc and are now 3.6pc above pre-covid levels.

Landsec said brands including Zara, H&M and Next have been closing smaller stores and instead doubling or tripling their store footprint in shopping centres.