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Land Securities posts almost $2 billion loss as pandemic batters retail

By Reuters

By Aby Jose Koilparambil

(Reuters) -Land Securities said on Tuesday its full-year loss widened by more than 500 million pounds as a steep decline in rental income and footfall during the pandemic battered the firm’s retail and leisure assets.

Commercial property firms have underperformed the wider real estate sector as multiple lockdowns and an ongoing moratorium on rent collection squeezed valuations of retail-focused assets, while remote working has weighed on office portfolios.

Land Securities, which counts office space as its biggest segment, said the value of its combined portfolio declined 13.7% to 10.8 billion pounds ($15.32 billion).

On a like-for-like basis, regional shopping centres and shops saw the largest reduction in value, down 38.2%, while leisure assets declined 22.9% and office assets dropped 4.3%.

“UK mall valuation declines look to have peaked in (the first half of 2021) and should stabilise from here,” JP Morgan analysts wrote in a note.

Land Securities Chief Executive Officer Mark Allan said there was a “real prospect of a strong consumption-led recovery” through the remainder of 2021 and 2022, although it would take longer for central London footfall to recover fully.

The company, one of Britain’s biggest commercial landlords, said a per share measure which reflects the value of its buildings, EPRA Net Tangible Assets, fell 17.4% to 985 pence.

The FTSE 100 firm reported a loss before tax of 1.39 billion pounds ($1.97 billion) for the 12 months ended March 31, its biggest since 2009 and compared with a loss of 837 million pounds a year earlier.

The company reduced net debt by 433 million pounds to 3.51 billion pounds over the year and declared a final dividend of 9 pence per share, having resumed quarterly payouts in November.

($1 = 0.7051 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Rashmi Aich, Kirsten Donovan)