Land Securities Group PLC ("Landsec") today announces its results for the year ended 31 March 2025.
Financial highlights
โข EPRA earnings up ยฃ3m to ยฃ374m, as strong 5.0% LFL net rental income growth and lower overhead costs more than offset impact from significant disposals early in year and a rise in finance costs
โข EPRA EPS up 0.4% to 50.3p, in line with expectations and ahead of initial guidance
โข Total dividend up 2.0% to 40.4p per share, in line with guidance
โข Profit before tax up to ยฃ393m, as strong 4.2% ERV growth supported ยฃ119m or 1.1% uplift in portfolio value, resulting in 6.4% return on equity and 1.7% increase in EPRA NTA per share
โข Group LTV of 38.4% and average net debt/EBITDA of 7.7x pro-forma for disposals since year-end, as long 9.6-year average debt maturity underpins resilience of capital base
Operational highlights
โข Delivered 5.0% LFL net rental income growth, ahead of guidance, with 8% rental uplifts on relettings / renewals in London and major retail, and continued strong leasing momentum since the year-end
โข Increased occupancy by 100bps on a LFL basis to 97.2%, the highest level in five years
โข Drove 4.2% ERV growth through successful leasing activity, adding to future income growth potential
โข Reduced overhead costs by 5%, with more than 10% further savings expected over FY26-27
Central London income growth increases, as investment market activity starts to pick up
โข Delivered 6.6% LFL net rental income growth, with occupancy up 120bps to 98.0%, ยฃ24m of lettings signed or in solicitors hands 7% above ERV, and relettings/renewals 13% above previous rent
โข Drove 5.2% ERV growth, as customer demand remains focused on high-quality space in best locations, with growth for current year expected to be at broadly similar levels
โข Reversionary potential increased to 12%, paving way for further near-term LFL income growth
โข Portfolio valuation up 1.0%, as yields start to stabilise and investment market activity continues to pick up steadily, supporting planned release of ยฃ2bn of capital employed from FY27 onwards
โข Set to complete ยฃ860m of developments in late FY26 at accretive 7.1% gross yield on cost, with encouraging customer interest expected to translate into first pre-letting activity in second half
Major Retail income up stronglyas brands focus on best destinations
โข Delivered 5.1% LFL net rental income growth, with occupancy up 110bps to 96.6%, ยฃ39m of lettings signed or in solicitors hands 11% above ERV, and relettings/renewals 8% above previous rent
โข Drove 4.0% ERV growth, capitalising on continued focus from brands on fewer, bigger, better stores, with similar growth expected for current year
โข Expect continued LFL income growth, as leasing pipeline remains strong and rental uplifts grow
โข Portfolio valuation up 3.4%, reflecting attraction of high-quality, growing income
โข Invested ยฃ610m in Liverpool ONE and Bluewater acquisitions at average 7.7% income return, with aim to invest a further ยฃ1bn in highly accretive growth of major retail platform over next 1-3 years
Progressed preparation of sizeable residential pipeline, ahead of first potential starts in late 2026
โข Started on site with infrastructure works, secured vacant possession and completed demolition for first phase of consented 1,800-homes Finchley Road scheme in Zone 2, London
โข Renegotiated development agreement at Mayfield, Manchester, unlocking option to deliver c. 1,700 homes from 2026 onwards, with decision on detailed planning for first phase expected in second half
โข Submitted outline/detailed planning application for masterplan in Lewisham, Zones 2&3, London, covering up to 2,800 homes, with planning decision expected in second half of year
โข Preparing for first potential residential development starts in late 2026, as part of strategic objective to invest ยฃ2bn+ in this structural growth sector by FY30
Maintained strong capital base, with ยฃ655m of capital recycling broadly in line with book value
โข Sold ยฃ496m of non-core assets during year plus a further ยฃ159m since year-end, on average 1% <mark style="background-color:yellow">below</mark> Mar-24 book value, with further non-core disposals expected in near term
โข Maintained solid capital base, with 9.6-year average debt maturity, ยฃ1.1bn cash and undrawn facilities, and pro-forma for disposals post year-end, 7.7x average net debt/EBITDA and 38.4% LTV
โข Capitalised on sector-leading access to credit during year, with ยฃ350m 10-year bond issue at 4.625% coupon and refinancing of ยฃ2.25bn revolving credit facilities at existing low margins