(Reuters) -British commercial property company Land Securities Group expects between low and mid single-digit percentage growth in annual London rental values despite continued pressure on building valuations.
Valuations have been hit by high interest rates, hurting investment business within the sector and offsetting relatively better performance on the operational front.
“Investment activity remains thin, but we expect this to pick up in 2024, which should start to support values for the best assets,” CEO Mark Allan said in a statement.
Landsec, which in May said it would invest more in prime retail space buoyed by a positive outlook for that portfolio, expects earnings per share for the full year to be broadly stable compared with last year’s 50.1 pence.
The London-headquartered firm, which is edging close to a 2.5 billion pound ($3.07 billion) disposal target set in late 2020, said overall Central London occupancy rose 60 basis points to 96.5%, with its West End portfolio at 99.6%.
Central London accounts for about two thirds of Landsec’s property portfolio.
Its half-year pretax loss deepened by 0.5% to 193 million pounds ($237.3 million), hurt by declining property valuations.
The FTSE 100 company said net tangible assets – an industry measure that reflects the value of its buildings – was down 4.6% year on year at 893 pence per share on Sept.
30.
The company said detailed planning consent had been secured for the first phase of office development at its Mayfield scheme in Manchester.
($1 = 0.8134 pounds)
(Reporting by Aby Jose Koilparambil in BengaluruEditing by Rashmi Aich and David Goodman)
