ANNUAL REPORT 2023

Central London, Retail, Mixed-use Places

Building on our competitive advantages. First to opportunities, in shape to act.

Three years ago we set out our strategy to create sustainable value – focusing on areas where we have a genuine competitive advantage, underpinned by the strength of our balance sheet. This strategy is built on a vision to shape successful and sustainable urban places where our customers can achieve their goals and our communities can realise their potential. Based on the quality of our portfolio, the expertise of our people and the strength of our customer relationships, this strategy is the right one, and we are well positioned to continue to pursue it.

Key highlights

Our people and culture
Our approach to sustainability
Our portfolio
More on our business
Useful downloads
Investor relations

"Whereas many companies slowed or paused activity in response to external market conditions, we have remained active, pragmatic and future-focused in executing our strategy during the year. Our areas of competitive advantage remain: our high-quality portfolio; the strength of our customer relationships; and our ability to unlock complex opportunities through our development and asset management expertise. These strengths are clearly reflected in our strong operational performance during the year and remain an advantage in the market. Landsec has a high-quality portfolio, a strong balance sheet and is well placed for long-term growth and although we are mindful of the wider economic challenges, we are excited about the future."

Mark Allan, Chief Executive

38.6p

Dividend per share (2022: 37.0p)

53.1p

EPRA earnings per share (2022: 48.0p)

936p

EPRA Net Tangible Assets per share (2022: 1,063p)

£10,239m

Combined portfolio (2022: £12,017m)

£393m

EPRA earnings (2022: £355m)

£400m

Inaugural Green bond issued under our Green Financing Framework

Our strategy

Landsec focuses on three areas of the UK real estate market where we can apply our unique competitive advantages and can maximise the value from our portfolio and our talent in shaping and sustaining places: Central London offices; Major retail destinations; and Mixed-use urban neighbourhoods.

What binds these three areas together is the importance of a sense of place to their enduring success, and to that of their surrounding areas. We strive to create, curate, and activate places that inspire people, generating value for all our stakeholders. In executing our strategy, we continue to be led by three things: working sustainably, meeting the needs of our customers, and being disciplined with our capital.

OUR STRATEGIC FOCUS
Offices

Changing working patterns and use of office space will reduce requirements, but modern, well-configured facilities that meet today’s flexible-working needs, in great locations, with amenities and excellent sustainability credentials, will still attract healthy demand. In addition, London is well set to continue its position as Europe’s pre-eminent global gateway city and will continue to attract and retain talent. The best spaces will thrive, and our portfolio is well placed to benefit from market trends.
OUR STRATEGIC FOCUS
Retail

With the effects of online retail, the pandemic and the current economic environment, there remains too much physical retail space in the UK, and some will convert to alternative uses such as leisure or residential. But the best physical retail space is thriving, and for many leading brands, online and physical channels are now firmly inter-connected. There is clear consumer demand for the best shopping centres with an attractive mix of retail, leisure and hospitality, and prime retail destinations have been resilient, as brands relocate or open to benefit from higher footfall.
OUR STRATEGIC FOCUS
Mixed-use urban neighbourhoods

There is an increasing desire to see a mix of living, working and leisure within distinct neighbourhoods, or even buildings, with convenience being a key motivation in a society where time is increasingly precious. Situated in attractive locations with strong transport links in some of the fastest-growing urban areas, mixed-use urban communities can achieve strong returns, as the appeal increases values across phases of development – known as placemaking. We are well placed to become a leading player in this market.

OUR PEOPLE AND CULTURE

At Landsec, we aim to create a high-performance environment where everyone can see clearly how they contribute to, and benefit from, Landsec’s success. We ensure this through frequent communication and feedback. We want to attract, recruit and retain the best people, to build a workforce that is skilled, adaptable and future-focused. Therefore we invest in learning and development for all, and support wellbeing, and healthy and safe workplaces. We know that if we take care of our people, our people will take care of our customers and our business.

OUR APPROACH TO SUSTAINABILITY

We design, develop and manage buildings in ways that will enhance the health of our environment and improve quality of life for our people, customers and communities, now and for future generations. We recognise that maintaining strong sustainability performance remains key to the value of our business. Our sustainability strategy – Build well, Live well, Act well – continues to focus our work on the ESG issues where we know we can have the biggest impact.

OUR PORTFOLIO

Our overall portfolio was valued at £10.2bn at the end of March. It is made up of the following areas:

Central London Our well-connected, high-quality office (84%) and retail and other commercial space (16%), located in the West End (69%), City (23%) and Southwark (8%).	63%
Major retail destinations Our focused investments in six shopping centres and three retail outlets, which are amongst the highest selling locations for retailers in the UK.	18%
Urban mixed-use Our investments in mixed-use urban places in London and a small number of other major growth cities, with medium-term repositioning or development potential.	7%
Subscale Assets in sectors where we have limited scale or competitive advantage and which we therefore plan to divest over time, split broadly equally between retail parks, leisure and hotels, the last of which we have sold since the year-end.	12%