Landsec is pushing ahead with 1m square feet of London property developments despite ongoing Brexit uncertainty and clouds over the property market.
The UK’s biggest listed property company by portfolio value said it had workers on site at four London schemes totalling 1m square feet of new buildings, part of a £3bn programme of potential developments.
The push to build comes despite previous reticence on the part of Landsec, which had earlier said development schemes would be held back until the UK reached a divorce deal with the EU.
Robert Noel, chief executive, said: “With a general election next month and the UK’s proposed exit from the EU further delayed, we remain alert to market risks. However, Landsec enters the next six months with confidence.”
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The company, formerly known as Land Securities, recorded a £147m loss for the six months to September, down from a £42m profit a year earlier, as tougher conditions in the retail property market cut £368m off the value of its portfolio, bringing the total value to £13.4bn.
Retail parks were the worst hit, with an 11.1 per cent fall in value, followed by regional retail with a 9.4 per cent decline, after a series of retailer failures cut into landlords’ rental income. However office property values rose slightly, by 0.3 per cent.
Landsec’s developments now under way are office-driven, such as Deutsche Bank’s new London headquarters at 21 Moorfields in the City of London, and schemes in Victoria and Piccadilly. Some 56 per cent of the space has already been let, Landsec said.
London office property has proved more resilient than expected since the Brexit vote, with strong demand against limited supply of new offices keeping capital values in positive territory.