Landsec to grow retail estate by £1bn as it records strong results

The group saw 5.1% like-for-like growth in retail net rental income in the year to March 31.

Occupancy was up 110 basis points to 96.6% with £39m of lettings signed or in solicitors’ hands, while relettings and renewals are 8% above previous rent.

It expects continued like-for-like income growth as the leasing pipeline “remains strong and rental uplifts grow” with a continued focus from brands on “fewer, bigger, better stores”.

Landsec explained that major retail remains its “highest conviction call” and why it plans to grow this portfolio by £1bn in the next one to three years.

Major retail destinations currently make up 24% of Landsec’s portfolio but it plans to increase this to 29% in the financial year 2026.

With around 90% of its retail assets in the top 1% of retail, the group said its destinations “continue to materially outperform” as total sales were up 3.4% and footfall up 0.4%, higher than the BRC benchmark of -1.7% in sales and -0.7% footfall.

Over the past year, 17 brands increased their space with Landsec, 30 new brands opened in its centres and 45 existing brands opened stores in new locations within Landsec’s portfolio. 

In the results, Landsec said: “In major retail, the top 1% of all shopping destinations in the UK provide brands with access to 30% of all in-store retail spend. 

“As close to 90% of our retail assets are in this top 1%, brands continue to invest in space with us, focusing on ‘fewer, bigger, better’ stores in the best locations. 

“Any pressure on brands’ margins from increased national insurance costs or wider economic uncertainty will likely sharpen this focus further and put more pressure on the tail-end of brands’ store portfolios. 

“As our occupancy is now higher than it was before Covid-19, we expect rental value growth this year to be around similar levels as last year.”