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Published
Nov 10, 2020
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​Landsec optimistic despite suffering a “significant” half-year of unpaid rents

Published
Nov 10, 2020

Landsec released its half-year results Tuesday and while the major retail landlord talked of a "strong balance sheet and new growth strategy” there was no getting away from the effects the pandemic has had on its business.


Bluewater


The impact on its results from unpaid rent and service charges was “significant”, it admitted.

In the six months, ​Covid-19 and lockdown led to a “sharp decline” in turnover-related income from its outlets, hotels and car parks. The impact of reduced income and higher bad debt provisions was behind the 49% decline in revenue profit to £115 million, from £225 million revenue profit recorded a year ago.

Like-for-like net rental income, excluding provisions for bad and doubtful debts, was down £31m, or 10.3%.

Landsec, which owns a raft of UK shopping centres including Bluewater in Kent, made bad debt provisions of £87m on top of the £23m provided in last year's results against quarterly rent due on 25 March.

This is based on a cautious assessment of the impact of concessions, CVAs and business failures on how much rent it will collect. “In total, we have provided for approximately 45% of the retail and leisure rent for the period”, it said.

The loss before tax for the period rocketed to £835 million from a loss of £147 million a year ago.

Landsec also saw £945 million knocked off the value of its property empire that's now worth £11.8 billion, down 7.7% from the prior six months.

“While conditions have improved from the early days of the pandemic, the effect of Covid-19 on our business and financial performance continues to be significant”, it said for the six months period to September 30.

But the business said it remains optimistic and while occupancy and footfall “has also fallen significantly in central London", the valuation impact on that part of our portfolio has been much less marked, underlining its quality and resilience”.

Chief executive Mark Allan said: "While today's results clearly show the impact of the pandemic on our business, Landsec remains in a fundamentally strong position. We look ahead with a clear strategic direction and are optimistic about the future’.

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