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UK's Landsec sells two retail parks as it restructures business

By Reuters

-Commercial landlord Land Securities said on Friday it sold two retail parks for 54.3 million pounds ($74.42 million), as part of a plan to exit non-core businesses as the pandemic reshapes the sector.

Commercial landlords are shoring up finances after having underperformed the wider real estate sector as multiple lockdowns and an extended moratorium on rent collection disrupted the income streams, particularly of their retail-focused assets.

“Retail parks represent a subscale sector for us and a clear opportunity to realise capital that can be better deployed in areas where we have a competitive advantage such as central London and urban mixed-use regeneration projects,” Phillip Davies, Land Securities’ head of investment, said in an emailed statement.

The FTSE 100 firm, one of Britain’s biggest commercial landlords, sold Derwent Howe Retail Park in Workington, Cumbria and Blackpool Retail Park to Supermarket Income REIT and Columbia Threadneedle, respectively.

Land Securities, which counts office space as its biggest segment, has seven retail parks remaining in its portfolio following the disposals.

Retail parks stand to attract better valuations as they have been relatively resilient during the COVID-19 pandemic, partly because essential retailers were allowed to operate during the lockdown from these parks that also provide for drive-in and open-air shopping experiences.

In April, mall operator Hammerson Plc exited the UK retail parks sector, selling seven retail parks to Canadian private-equity firm Brookfield Asset Management for 330 million pounds.

($1 = 0.7296 pounds)