Bluewater owner Landsec's new strategy includes London focus
Property giant Landsec shared the broad outlines of a new strategy from still-new CEO Mark Allan on Monday and it may surprise some that it includes a continuing focus on retail, on London and on giant regional malls.
The company owns or part-owns huge shopping malls such as Bluewater and Westgate, as well as One New Change in the City of London, among others. It also has a retail park portfolio but is planning to pivot away from these and retail park assets will be sold, along with certain hotel and leisiure assets.
Yet London, which accounts for 64% of its portfolio today, will remain a priority, despite the historically low footfall in the city at present.
Retail “is facing clear structural challenges as a result of the emergence of online shopping, and these have been accelerated by Covid-19, [but] not all retail is the same,” it said. “Regional shopping centres have been most impacted by these challenges, but these represent only 13% of our portfolio and our shopping centres are amongst the very best in the sector. Of the balance, our outlets remain an attractive sub-sector, many of our suburban shopping centres offer significant repurposing potential and our investment in retail parks is modest.
“Our review has highlighted that certain elements of our portfolio are sub-scale, where we have little or no competitive advantage, while some structural growth areas are under-represented. This presents an opportunity to refocus the portfolio over time.”
The company’s property empire was worth nearly £13 billion in March, although that valuation has fallen given the impact of the pandemic. Landsec, like most retail landlords, has struggled to collect rent from under pressure retailers that were forced to close their shops and then found reduced consumer appetite for visiting them once they reopened.
The company said on Monday that London remains “one of the world’s gateway cities” and it sees “clear potential to recycle capital out of some assets and reinvest into new growth opportunities”.
As mentioned, it will sell off assets that don't have huge growth potential, which is why its retail parks are on the auction block.
And it will “reimagine” its remaining retail business. It didn't go into any detail around this but it could mean that it follows other landlords in making use of surplus space for other purposes, such as housing.
Allan is clearly looking at a time when the pandemic is just a memory and city and suburban centres become the buzzing locations they once were.
He said the new strategy “will position the business to benefit from long-term macro trends”.
Copyright © 2023 FashionNetwork.com All rights reserved.