Landsec to reduce exposure to office assets, pivot to residential
By Josh White
Date: Thursday 27 Feb 2025
(Sharecast News) - Land Securities reaffirmed its strategic focus on income and earnings per share growth in an update on Thursday afternoon, outlining plans to rebalance its portfolio towards higher-yielding assets while reducing exposure to office developments.
The FTSE 100 property investor, which said trading since its half-year results in November had been "positive", said it expected to deliver 20% earnings per share growth, from 50p currently to around 60p by 2030, underpinned by capital rotation and cost efficiencies.
Dividend payments would now be made semi-annually, aligning with financial results.
Since its 2020 strategy review, Landsec said it had completed over £3bn in disposals and established a high-quality portfolio of office-led, retail-led, and residential-led assets.
The next phase of its strategy would see increased investment in its £3bn retail platform and the establishment of a £2bn-plus residential platform, the board announced.
To fund the shift, it said it planned to scale back office development, releasing £2bn of its £6.5bn in office-led assets.
In the short term, Landsec said it was aiming to unlock £350m from pre-development assets, further invest in retail through acquisitions such as Liverpool ONE, and exit £800m in retail and leisure park assets.
Over the next five years, it said it would shift capital towards residential projects, leveraging existing development opportunities and selective acquisitions while reducing office-led development starts by at least half.
The company reported continued operational strength, with occupancy and rental income growth across its portfolio.
It was expecting to achieve around 4% like-for-like net rental income growth this year.
Following its upgraded guidance in November, Landsec said it now anticipated full-year 2025 EPRA EPS to slightly exceed last year's 50.1p, with further progress expected in 2026 towards its long-term earnings target.
At 1513 GMT, shares in Land Securities Group were down 0.52% at 572.5p.
Reporting by Josh White for Sharecast.com.
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