Land Securities today said that the retail environment would remain “challenging” as omnichannel retail continues to evolve, reflecting changing consumer demand.
Robert Noel, chief executive of the property development and management company, said only the retail locations which best reflected that demand would benefit as shoppers spent more.
His comments came as Land Securities today reported pre-tax profits of £2.4bn in the year to March 31, up from £1.1bn last time. The rise was driven by a resurgence in the value of its property holdings, which also span the commercial and leisure sectors.
In its full-year report Land Securities said the “polarisation between winning and losing locations” would continue, and only the best trading locations would see meaningful rental growth in the short and medium-term. Land Securities, which this year sold a 50% stake in Cabot Circus, Bristol (pictured) as it looks to focus on sites with better prospects that it would continue to be “relentless in our asset management, rigorous in our investment decisions and passionate about working with our customers to deliver the space they need.”
Noel said: “After two exceptionally active years in our retail portfolio, our focus on owning and managing great destinations will continue. We will recycle capital as required. Consumer spending increased during the year, which is always welcome news for retail businesses and the outlook is more positive. However, we still do not expect this to translate into rental growth across the entire sector. We have talked about winners and losers before, and it is the locations which are most in tune with shoppers’ evolving tastes and needs that are set to benefit from consumer spending growth.”