All appears well in a UK commercial property sector moving steadily away from the pandemic darkness with Landsec becoming the latest firm to deliver strong results and outlooks.

Let’s leave it to its chief executive Mark Allan to tell us how good its half year ended 30 September was: “Our operational outperformance continues, with further growth in occupancy and positive rental uplifts across our retail and London portfolio, which is translating into accelerated income growth.” 

And if you combine that with cost efficiencies and stabilising property values, Landsec has every right to raise its outlook with this outperformance expected to flow through into as far as FY26.

With its portfolio of London properties increasingly concentrated, with 72% now in the West End, up from 48% three years ago, Allan noted that customer demand for its top spaces “remains robust and investment market activity has started to pick up”. 

That gives Landsec the confidence to reposition its portfolio “towards higher-return opportunities” and deploying further capital towards this in the second half, he said. 

He added: “Having managed our balance sheet well as markets corrected, we are now well placed to deliver growth and attractive returns.”

In the accompanying trading statement, the headline number was the return to pre-tax profit, with £243 million turning around the year-ago’s pre-tax loss of £193 million when lower yields due to high interest rates, inflation and a weak property market hurt the bottom line.

EPRA (earnings from operational activities) came in at £186 million, down from £198 million in the first half of 2023.

EPRA Net Tangible Assets (the measure that represents the value of its buildings) rose 1.4% to 871p per share, as of 30 September, compared with the March-end valuation. This is also above the company-compiled analysts’ estimates of 863p.

Retail highlights for the half-year included its focus on “fewer, bigger, better stores with significant upsizes and lettings with leading brands such as Primark, Pull & Bear, Bershka, Sephora and JD Sports”.

In the period, despite its central London focus, Landsec also acquired an additional £120 million stake in Kent mall Bluewater from GIC at an “attractive” 8.5% yield. That increases ownership of the popular destination to 66.25%.