27th Sep 2023 09:32
(Alliance News) - Commercial property developer Land Securities Group PLC on Wednesday said customer demand for its office space in London has remained strong since the end of March.
As a result, over the first five months of Landsec's current financial year, occupancy in its Central London portfolio has increased by a full percentage point to 96.9%. Landsec said it has signed, or is close to signing, GBP17 million in lettings during the period, at 3% ahead of estimated rental value.
Significantly, Landsec said its office estate near Victoria Station, which makes up half of its Central London business, is now 100% let.
As a result, the company has committed to the start renovation work on Thirty High, formerly know as Portland House, at Bressenden Place, near the transport hub. It is expected to be completed in the summer of 2025, with the development cost for the refurbishment expected to be about GBP400 million, which would result in a gross yield on cost of about 7.5%, Landsec said.
The company said its decision to sell off mature, single-let office buildings has positioned the business for a "higher-for-longer interest rate environment".
Chief Executive Mark Allan said: "We have flexibility to respond to the opportunities that will start to arise from the adjustment to a higher rate reality, as it remains clear that customer demand for the most sustainable, high-quality space in the best locations remains resilient."
Landsec shares were down 1.7% at 595.00 pence early Wednesday in London.
By Tom Waite, Alliance News editor
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