Two major property firms take sales hit amid high street decline

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Landsec British Land
// Landsec & British Land have reported full-year losses as well as a drop in store portfolio value
// For the year ending March 31, Landsec posted a £123 million loss before tax
// British Land’s portfolio value fell by 4.8% thanks to retail decreasing by 11.1%

Two of the UK’s largest property development companies have suffered from the high street’s tough trading conditions as they’ve reported full-year losses and a drop in the value of their retail portfolio.

Landsec, which is the UK’s largest commercial property development and investment company, recorded widening full-year losses against a backdrop of what chief executive Robert Noel said was “well-publicised difficulties in the retail market”.

For the year ending March 31, Landsec posted a £123 million loss before tax in comparison with a pre-tax loss of £43 million the previous year, despite an 8.9 per cent rise in sales to £442 million.

Landsec operates shopping centres like Bluewater, Westgate Oxford and Trinity Leeds, and said it has delivered a “strong year operationally” despite the “backdrop of political gridlock and the well-publicised difficulties in the retail market”.

Noel added near-term improvement in retail market conditions wasn’t foreseeable, with CVAs expected to increase.

“Rental values are likely to decline further in shopping centres and retail parks, though we expect continued rental growth in outlets and select leisure destinations,” he said.

Meanwhile, British Land – which owns Meadowhall in Sheffield and various other retail precincts and out-of-town centres – reported a rise in rental growth, but portfolio value suffered.

The property giant said last year saw like-for-like rental growth of £15 million, “more than offsetting the £14 million impact of retail CVAs”.

However, its portfolio value fell by 4.8 per cent thanks to retail decreasing by 11.1 per cent.

“Retailers continue to face the challenge of fundamental structural change compounded this year by short-term operational headwinds,” British Land chief executive Chris Grigg said.

“As a result, we have seen further CVAs and administrations from troubled operators and, although faring better than the market overall, we have not been immune; the annualised rental impact from CVAs and administrations that have occurred over the last two years was £16.9 million including £900,000 at properties which have subsequently been sold,” he said.

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