Land Securities Group on Tuesday reported a 3.2% rise in first-half underlying earnings, driven by strong rental income growth as its strategic shift towards prime retail properties and away from some offices begins to pay off.
Underlying earnings per share, a key industry metric, rose to 25.8 pence for the six months ended Sept. 30, from 25.0 pence a year earlier, the company said.
However, pretax profit fell to 98 million British Pounds from 243 million British Pounds, which the company attributed to a loss on the sale of 644 million British Pounds of low-returning assets.
The company's retail-led portfolio saw like-for-like net rental income grow by 5.0%, supported by a 7.7% increase in retail sales across its properties.
Landsec said it is prioritizing new investment in retail over the next 12 to 18 months and plans to invest a further 1 billion British Pounds in the sector.
Chief Executive Mark Allan said, "We continue to see clear positive momentum across every part of our business, notwithstanding the wider economic environment."
Reflecting the strong performance, Landsec raised its full-year guidance for like-for-like net rental income growth to between 4% and 5% and lifted its medium-term earnings potential.
The British property developer increased its interim dividend by 2.2% to 19.0 pence per share.
More from this issuer
Related coverage
Land Securities Group is accelerating a strategic pivot towards retail property, planning to sell more of its London offices to reinvest in what it sees as a higher-growth area.