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Landsec Annual Report 2021

The global pandemic had a significant impact on our business, our customers, and our other stakeholders  though we remained responsive and supportive throughout.

However, looking ahead, we see opportunities. With our scale, experience, skills and portfolio, and with a positive purpose as an ambition, we can help shape the new landscape. In this way we will grow, with purpose.

Our results for the year to March 2021 clearly reflect the challenges of the pandemic, with lockdowns meaning the vast majority of our portfolio was either closed or substantially unoccupied for over half the year. However, from the very first lockdown we have focused on ensuring our business can emerge from the pandemic in as strong a position as possible. As a result of this approach, Landsec is poised for recovery, with a strategy that positions the business for long-term growth.

Mark Allan, Chief Executive
Download the Chief Executive's statement PDF

27.0p

Dividend per share, up 16.4%

33.9p

Adjusted diluted earnings per share (2020: 55.9p)

985p

EPRA net tangible assets per share, down 17.4%

-15.9%

Total business return (2020: -8.2%)

£(1,393)m

Loss before tax (2020: £(837)m)

£6.5m

Social value created during the year

Our results for the year to March 2021 clearly reflect the challenges of the pandemic, with lockdowns meaning the vast majority of our portfolio was either closed or substantially unoccupied for over half the year. However, from the very first lockdown we have focused on ensuring our business can emerge from the pandemic in as strong a position as possible. As a result of this approach, Landsec is poised for recovery, with a strategy that positions the business for long-term growth.

27.0p

Dividend per share, up 16.4%

33.9p

Adjusted diluted earnings per share (2020: 55.9p)

985p

EPRA net tangible assets per share, down 17.4%

-15.9%

Total business return (2020: -8.2%)

£(1,393)m

Loss before tax (2020: £(837)m)

£6.5m

Social value created during the year

Responding to the present, planning for the future

This year, we focused on two clear outcomes.

The first was to do everything we could to ensure Landsec emerged from Covid-19 in as strong a position as possible. Our response for our customers, people, communities and partners was rapid, flexible and always with safety at its heart. While our rental income and profits were down, we have ensured our business remains healthy, and have retained strong relationships with our customers.

The second was to re-examine the purpose, strategy and culture that will position us to achieve growth and make the most of Landsec’s undoubted potential. Covid-19 has accelerated trends in retail and offices, and we have formed a clear strategy that responds to these trends.

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OUR STRATEGY

We have a positive purpose as an ambition. We believe it will attract more customers, talented people, valued partners. With this purpose as its foundation, our new strategy aims to grow value for Landsec and all our stakeholders.

The strategy comprises four priority areas - Optimise, Reimagine, Grow and Realise. The more we grow through our strategy, the closer we will come to truly achieving our purpose. In this way we will grow, with purpose.

OPTIMISE

We aim to optimise our assets in central London. By this, we mean taking steps towards greater alignment with growth sectors and districts in the capital, evolving a broader range of propositions for our customers, continually deploying our development expertise, and taking a prudent approach to selling assets to fund long-term growth.

REIMAGINE

We will reimagine our regional retail business. Our outlets have solid growth potential. However, there is an opportunity to significantly reshape the models of our six regional shopping centres – understanding sustainable rent levels for these customers is fundamental to our approach.

GROW

We will target enhanced returns through significant investment in mixed-use urban opportunities, both from within our portfolio and through new investments in London and potentially other major UK cities.

REALISE

We intend to realise capital from sectors where we don’t have scale or competitive advantage on our side, such as leisure, hotels and retail parks. Although these sectors have potential, our capital is better deployed elsewhere. We will therefore dispose of these assets in a managed way over time.

OUR STRATEGY FOR GROWTH

Download Our strategy PDF

Our culture

While undertaking our strategic review, we also drew on significant input from people across our business to arrive at clarity on our purpose and culture. The result is an authentic purpose, a strategy agreed by the whole business, and a culture our people recognise, support and unite within. Our culture defines how we do things, how we behave, and how our leaders can inspire and motivate. It provides a common language to enable our people to thrive and harness their potential. So our culture is as important as our strategy.

 

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our culture

Net zero carbon

Despite a temporary drop in the rate of greenhouse gas emissions, caused by lockdown restrictions, climate change is still the top priority for governments and forward-looking businesses. Investor requirements for disclosing climate-change risks and opportunities keep increasing, and our customers are setting ambitious climate commitments of their own.
 

During 2020, Landsec has been encouraging our industry to move forward in its response to the climate emergency. We’ve published our net zero carbon pathway, in line with the Better Buildings Partnership Climate Change Commitment, outlining our plans for net zero carbon for both our new and existing buildings.

 

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net zero

Social value

Social value is a way of describing how businesses can benefit people, communities and society as a whole. At the start of 2019, we set a target of creating £25m worth of social value by 2025 through four programmes: community employment, education, charity partnerships and volunteering. At the end of the second year of this target, we’d created over £11m worth of social value. The pandemic has accentuated the inequalities in society and highlighted the importance of our social initiatives and, despite its challenges, we’ve continued to invest where we can have the greatest impact.

 

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social value

Our market

The last year was dominated by the impacts of the pandemic: most offices in London remained open though under-used, while food and beverage, leisure and hotels were hit hard. The impact was not uniform across the retail sector, with outlets, retail parks and centres with essential retail still relatively resilient. Central London retail was badly affected. However, while Covid-19 had immediate effects, it also accelerated or decelerated changes that have long been coming, and you can read here about six global forces of change that informed our strategy and will affect our business in the coming years.

 

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our market

Our £10.8bn portfolio

We focus on maximising financial, physical and social value by providing the spaces and environments that allow businesses and people to thrive. Our Combined Portfolio includes office space in London, and retail, leisure and hotel assets across the UK.

Download our Operating and portfolio review

More on our business

Sustainability

Good governance is vital in any year, but this year it has been a critical foundation for Landsec’s response to Covid-19, providing a framework for effective decision-making and addressing the changing needs of our stakeholders.

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Performance

We set financial and non-financial KPIs in line with our strategy. They provide clear direction for our people and a measure of our progress in 2021.

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Corporate governance

Strong corporate governance and culture underpins performance, inspires trust and is essential to Landsec’s long-term success.

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Investor Relations

Edward Thacker

Edward Thacker

Investor Relations - equity

+44 (0) 20 7413 9000

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