Landsec shares dive after £1.2bn wiped off property value during coronavirus crisis
Landsec’s share price plunged this morning after the property giant revealed it had taken a £1.2bn hit to its portfolio value.
Landsec, one of the UK’s largest property companies, also warned that it does not expect the economy to recover until at least 2022.
The value of the company’s portfolio slumped 8.8 per cent to £12.8bn, a fall of £1.18bn, driven by a sharp drop in the value of its retail assets. Landsec’s share price fell more than 14 per cent this morning.
Landsec’s retail property value declined 20.5 per cent in the year. The sector had suffered from an ongoing challenging environment and the early effects of coronavirus at the end of the financial year.
The company scrapped its third interim dividend and is not proposing a final dividend.
Landsec reported a loss before tax of £837m in the financial year to 31 March, compared to a loss of £123m last year, as underlying earnings were wiped out by the drop in asset value.
“Ongoing social distancing measures will affect certain sectors much more than others, all businesses will need time to work with their global supply chains and workforces to resume trading as normal and heightened levels of caution amongst the general public are likely to affect behaviour for many months to come,” the company said in a statement today.
“While it is too early to predict outcomes with any certainty, it seems prudent to plan for more business failures and higher vacancy rates across our portfolio, in particular leisure and retail, and we don’t expect to see the economy recover to pre-Covid-19 levels before 2022 at the earliest.”