Bluewater owners Landsec devalue portfolio by £1 billion and record huge losses following coronavirus pandemic
15:57, 20 November 2020
updated: 15:59, 20 November 2020
Bluewater's owners have devalued their property portfolio by £1 billion after recording huge losses during the economic crisis caused by the coronavirus pandemic.
Landsec reported a 7.7% reduction in the value of its assets in its half-year financial reports to £11.8bn.
The company, which owns the management rights for Bluewater and is the majority shareholder with a 30% stake, has released a new strategy and says it will be "reimagining" its retail portfolio.
It says this will focus on sustainable rents, appropriate leasing models and a customer-centric approach.
It follows the company posting pre-tax losses for 2020 of £835m compared to £145m last year.
The value of the management rights for Bluewater decreased by £4m in the financial year ending in March 2020 and are now said to be worth £7m to Landsec.
Company statements say this was due to a "decline in the management fees expected to be earned" after the shopping centre's management rights declined in value.
Bluewater is co-owned by Lend Lease Retail Partnership (25%), M&G Real Estate (17.5%), GIC subholding (17.5%), Royal London Asset Management (7.5%) and Aberdeen Asset Management sub holding (2.5%).
The 240-acre site is estimated to be worth more than £200m.
Across its portfolio, the company has launched an £80m support fund for retail, leisure and hospitality clients impacted by the pandemic.
Dividends for shareholders across the Landsec group halved from 23.2p in 2019 to 12p in 2020.
Landsec is the UK's largest commercial property company and owns a vast portfolio of London office space.
It says redevelopment opportunities of its London properties to mixed use regeneration means the company believes it will be able to invest and not have to sell off its other assets like Bluewater.
Chief executive Mark Allan said: “While the results clearly show the impact of the pandemic on our business, Landsec remains in a fundamentally strong position. Together, the high quality of our portfolio and low leverage of our balance sheet provide a solid foundation for executing our growth strategy and creating value for all stakeholders.
"This strength also means we have been able to take a proactive and responsible approach to the challenges of Covid-19, supporting our communities and customers.
“As we begin to look beyond Covid-19, I am confident the business is well placed to capitalise on opportunities as they emerge.
"The investment market for high-quality London office assets, such as those owned by Landsec, has remained robust throughout the pandemic and there is little sign of that interest waning.
"Access to this liquidity, coupled with the acquisition and development opportunities that are likely to arise as a result of increased obsolescence of older office stock, as well as the long-term need for urban mixed use regeneration, mean there will be ample opportunity for Landsec to create significant value.
"We look ahead with a clear strategic direction and are optimistic about the future.”
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