Amazon's 4-star shop is one example of online retailers opening shopping centre sites. Image courtesy of Amazon
Land Securities says the prime retail destinations it now specialises in will continue to benefit from structural shifts in retail – because the experiences they offer cannot be replicated online.
The property developer and operator says that about 17% of retail space in the UK is now surplus to requirements, and expects that figure to rise to 25% by 2025. With prime retail rents now abut 40% lower than their peak, and values about 65% down, Land Securities has seen retailers relocate into its prime shopping centres, leaving secondary locations behind. Digital native brands are also taking store space to operate alongside their websites. Amazon, for example, has taken a lease for its first Amazon 4-star shop in the UK at Bluewater, while Crep Collection Club and Vanilla have opened shops for the first time in Land Securities shopping centres.
Land Securities says that the brands that have space in its shopping centres are now seeing sales within about 3% of what they were in pre-pandemic 2019. Outlet sales – calculated on a like-for-like basis that strips out the effect of store openings and closures – are now 7.9% ahead of the same period in 2019. The company is selling its retail parks in the short to medium term, leaving it with around 20% of its portfolio in core retail. Its focus, however, will remain on major retail destinations.
Land Securities today reported a pre-tax profit of £275m in the six months to September 30 2021, representing a recovery from a loss of £835m last year. Its EPRA earnings grew 56.6% to £180m from £115m last time, and its property valuations returned to surplus – of £81m – from a loss of £945m a year earlier. EPRA is a measure of the post-tax profits attributable to shareholders in property investment companies. Over the last six months Land Securities has sold £250m in assets and is making £616m in acquisitions around its new strategy.
The property developer and operator has also today published a plan to reduce its carbon emissions by 70% by 2030 from a 2013/4 baseline through a £135m net zero transition investment plan. It says it will unveil its first net zero office building, The Forge, in 2022.
Land Securities chief executive Mark Allan says: ““In focusing our strategy on shaping three distinct places – central London offices; major retail destinations; and mixed-use urban neighbourhoods – we are bringing renewed vigour to the business and creating value for all our stakeholders.
“One of the ways that we create value is by taking leadership positions on the issues that matter. Today, we are proud to set out a fully costed investment plan to transition our business towards net zero, ensuring that we deliver on our science-based target to reduce our carbon emissions by 70% by 2030.
“Our actions over the last six months and throughout the pandemic have enabled us to significantly increase operational activity and we remain in a strong financial position. We look forward to demonstrating further progress over the coming months.”
via https://AiUpNow.com November 16, 2021 at 08:47AM by Chloe Rigby, Khareem Sudlow,
