Landsec has posted a pre-tax profit of £243m in its opening half results as the property developer suggested a return to office working had aided its recent performance.
The company said that positive rental uplifts across its London portfolio in particular had translated into accelerated income growth.
Landsec has reduced its assets in Central London since the COVID pandemic and had reported a loss of £193m in its H1 period last year.
However, the firm revealed in its latest trading statement that with property values becoming more stabilised in 2024, and with growth in rental values driving a modest increase in capital values across its portfolio, it had achieved a positive total return on equity of 3.9% over the six months to the end of September.
Landsec chief executive, Mark Allan, said he expects these trends to “persist”, as customer demand for the developer’s space remains “robust”, and as investment market activity has started to pick up.
“We have continued to reposition our portfolio towards higher-return opportunities and are confident of deploying further capital towards this in the second half,” Allan added. “Having managed our balance sheet well as markets corrected, we are now well placed to deliver growth and attractive returns.”
Property analyst at Quilter Cheviot, Oli Creasey, commented that Landsec’s H1 results were “strong”, particularly when considered against “recent history and expectations”.
“Today’s results represent a positive surprise for shareholders, and the property market generally, demonstrating that core property sectors are likely past the low point in valuations and have now returned to positive, albeit modest, valuation growth,” Creasey said.
“Management is mindful of the potential impact the recent October budget could have on the company’s tenants, but are supportive of the Government’s growth ambitions, particularly the drive for residential building, which supports the company’s mixed-use urban redevelopment pipeline.”
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