Commercial property investor Land Securities (LAND) gained 1.1% to 530.9p as recently appointed chief executive Mark Allan revealed his plans to get the group back on a growth path.
Well-regarded industry figure Allan, who joined from developer St Modwen Properties (SMP), has announced four strategic priorities:
* Optimise the central London portfolio - including selling some assets to crystallise value.
* Shaking up the retail side - outlets seen as having growth potential while malls need ‘reimagining’.
* Realise capital from selling over time sub-scale areas like hotels, leisure and retail parks.
* Focus on urban opportunities including regeneration of existing mixed use assets in London and potentially adding more in other UK cities.
The focus on cities is interesting given they have probably been most heavily disrupted by Covid-19.
Allan also highlighted some inherent strengths in the business including a robust balance sheet and the quality of its assets in the centre of London.
‘CLEAR AND SENSIBLE BLUEPRINT’
Numis analyst Robert Duncan commented: ‘The revised “Positioning Landsec for growth” strategy is, in our view, a clear and sensible blueprint for growth in that instead of being radical for being radical’s sake, it provides a clear outline of which areas will be prioritised (Central London - offices and retail), which need investment (parts of retail - malls and outlets), which need to be exited (hotels, leisure and retail parks) and where future growth will come from (mixed-use urban opportunities, such as its London malls).
‘In addition, there were two key points that also caught our eye: 1) “Income will be an important component of our property returns but we do not believe it should be the key driver”, and 2) “Delivering our strategy will involve taking more operational risk and this will be offset through lower levels of financial gearing”? the market also needs to be clear that delivery - both strategic repositioning and asset/development - will take time.’
