Property bosses are pinning their hopes on a Covid-19 vaccine to ease pressure on the industry after Britain’s biggest commercial landlord wrote almost £1billion off the value of its assets.
Office and shop owners said the potential scientific breakthrough could pave the way for workers to return to their desks and families to struggling high streets having stayed away for much of the year due to the pandemic.
It came as Land Securities, which owns the Bluewater shopping centre in Kent and offices in London, saw its half-year losses balloon from £147million to £835million following a £945million drop in the value of its portfolio.
Land Securities, which owns the Bluewater shopping centre in Kent, saw its half-year losses balloon from £147m to £835m following a £945m drop in the value of its portfolio
The firm’s tenants – particularly those in the hard-hit retail sector – have struggled to pay rent during the crisis as lockdown restrictions and increased working from home have hammered visitor numbers.
That has in turn hurt Landsec’s rental income, while the switch of many shoppers to online retailers has also hurt the value of its stores and malls.
Regional shops and shopping centre values tumbled by as much as 20 per cent in the six months to September 30, the company said. Offices proved to be more resilient, however, and fell by just under 2 per cent.
But in an upbeat assessment, Landsec insisted that it was in a strong position to bounce back from the pandemic and revealed it was bringing back a 12p dividend in January after cancelling the payout this year.
And the company’s boss, Mark Allan, hailed promising results from US firm Pfizer’s Covid vaccine trials as a source of hope that was ‘positive for sentiment on all fronts’.
Land Securities, which owns the Bluewater shopping centre in Kent (pictured), saw its half-year losses balloon from £147m to £835m following a £945m drop in the value of its portfolio
Speaking to analysts, he said: ‘Of course, we are still in unsettled times, but the path out of the pandemic through mass testing, more effective treatment and, ultimately, a vaccine is much clearer than it has been.
‘Our proactive, responsible approach has helped to ensure that despite the, in many cases, extreme impact of Covid, Landsec remains in a fundamentally strong position.’
His comments were echoed by other property bosses.
Christophe Cuvillier, the boss of Westfield shopping centre owner Unibail-Rodamco-Westfield, said the announcement of a possible Covid vaccine ‘is tremendous news for all and marks a major step in the global fight against the pandemic’.
‘This could have a significant positive impact on retail real estate in general’, he told the Evening Standard newspaper.
Paul Williams, at Derwent London, added: ‘Confidence in a safe return to work is an essential part of getting London back to full strength and a successful vaccine would be an important step.’
Landsec has already revealed that it plans to reduce its £12billion portfolio by about one-third in the wake of the pandemic, selling its retail parks and ploughing cash instead into building more lucrative developments in London such as high-end offices.
It said that many major London firms were sticking with their current office footprint for now.
For example Deutsche Bank, which recently leased a 560,000 square foot office at 21 Moorfields, was likely to make ‘little or no change’ to its requirements, Allan said. Landsec shares rose 4 per cent, or 25.8p, to 669.2p.