Property giant Landsec has said it expects a “healthy” like-for-like income growth in the future as retail occupancy hits a 20-year high.
The group saw like-for-like net rental income rise 5.5% in the year to March 31, 2026, with occupancy levels reaching a 20-year high of 97.7%.
Retail sales across its destinations outperformed others, as sales grew 6.3% compared with a UK average of 1.1%.
Estimated rental value was up 5.8%, ahead of guidance and the highest growth in two decades, with a target to deliver a 4.5%-7% compound annual growth rate by the full year 2030.
Landsec said that rental markets continue to be characterised by these trends: “A significant concentration of demand on the very best space coupled with heavy constraints on new supply”, meaning upward momentum in rents continues for its best-in-class portfolios.
Around 85% of the group’s assets are in the UK’s top 1% retail destinations, and sales growth in said locations has outperformed the UK average by 19 points over the last four years.
Looking ahead, Landsec said the ongoing adoption of AI and emerging technologies will “likely act as a further accelerant of occupiers’ focus on the very best space”.
It added that brands expect the rise of AI and agentic commerce to put more focus on the physical experience and connection with shoppers, which ties into the trend of fewer, bigger, better stores over the last few years.
Landsec chief executive Mark Allan said: “Over the past few years, we have actively positioned Landsec for a higher inflation and higher interest rate world. We have focused our portfolio on the best quality locations where customer demand is highest, scaled back development, reduced our overhead costs, and maintained our strong capital base.”
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