Land Securities has reported a 6.2% rise in like-for-like net rental income for the first half of its financial year, beating its own guidance as demand for its offices and shops held up.

The commercial landlord, known as Landsec, published half-year results for the six months to 30 September on Friday 13 November. Rental income growth came in ahead of the 3% to 5% range the group had guided for, and Landsec reiterated its full-year guidance alongside the figures.

Earnings per share were effectively stable at 25.9p, against 25.8p a year earlier, while the interim dividend rose 2.1% to 19.4p. Pre-tax profit more than doubled to £243 million, up from £98 million in the same period last year.

Offices and retail drive rental growth

Landsec is one of Europe's largest real estate groups, with a portfolio of offices, retail assets and residential projects concentrated in major UK cities and valued at around £10 billion. The group has been reshaping its estate, selling lower-returning assets and recycling the proceeds into higher-quality space.

The 6.2% rise in like-for-like net rental income reflects rent growth on relettings and renewals across the portfolio, together with high occupancy. In its previous half-year update, the group reported occupancy at a decade high and income growth of 5.2%, with uplifts of 6% on relettings and renewals.

Landsec also said it had cut overhead costs, helping to keep earnings steady even as it sold assets that generated limited or no return. In the prior half year it sold £644 million of such assets as part of its capital recycling programme.

Outlook held steady

Landsec said full-year earnings per share remained on track to be stable compared with the previous year, in line with guidance. Looking further ahead, the group said earnings per share in the 2028 financial year were set to grow by a high single-digit percentage.

The results come at a sensitive moment for UK commercial property. Landlords have been navigating higher borrowing costs and a shift in how office space is used, while retail landlords have faced pressure from weak consumer spending. Landsec's figures suggest its best-located offices and shopping centres are still attracting tenants willing to pay higher rents.

Investors will hear more detail at the group's investor presentation at 9:00am GMT on Friday. The shares were in focus at the London open, with the FTSE 100 called around 35 points lower after a downbeat session on Wall Street and a mixed performance across Asian markets.

Source: Sharecast