Retail park-owner Land Securities planning to cut its portfolio by a third as Covid pushes more shoppers online
Land Securities is selling its retail parks as the Covid-19 crisis pushes more shoppers online.
The landlord, which owns the Bluewater shopping centre in Kent, said the shake-up was part of plans to reduce its £13billion portfolio by about a third.
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It wants to plough cash into lucrative developments in London instead and ‘reimagine’ its approach to retail, so its portfolio mainly consists of traditional shopping centres and retail ‘villages’ in out-of town locations.
Land Securities, which owns the Bluewater shopping centre in Kent (pictured), is selling its retail parks as the Covid-19 crisis pushes more shoppers online
As part of the changes, Landsec will drum up hundreds of millions of pounds for investment by selling hotels, retail parks such as Lakeside in Grays, Essex, and leisure parks like Xscape in Milton Keynes.
It will also sell some London offices, which have little potential for growth but represent attractive assets for long-term income investors such as pension funds.
Boss Mark Allan yesterday said the changes were ‘based on a realistic assessment’ of the challenges facing shops and hospitality businesses, which have been hammered by temporary closures, lower visitor numbers and a huge shift to online spending during the pandemic.
At a virtual capital markets day yesterday, he added: ‘We are signalling our intention to become net sellers over the next few years.’
It follows a major review of the company’s assets.
Landsec says the regional shopping centres it owns, which also include Oxford’s Westgate and Trinity Leeds, will be revamped to become more mixed-use, potentially meaning they could include offices and housing.
And it said it will continue to enhance its outlet villages, such as Braintree Village, in Essex, which it said were the ‘strongest performing segment’.
At the same time, Landsec predicts London will ‘continue to be a magnet for global capital, talent and tourism’ and remain at the centre of its business.
Assets in the capital account for 64 per cent of the firm’s portfolio and Allan said they would remain in the majority.
The value of Landsec’s portfolio fell from £13.8billion to £12.8billion in the year to March 31.