Land Securities Group PLC

For the half year, Landsec said like-for-like income growth was 5.2% across the portfolio. EPRA EPS increased 3.2%, and the interim dividend rose 2.2%. NTA per share fell slightly, to 863p, and portfolio valuation was effectively stable, with a 0.5% move after offsets. LTV was 38.9% pro forma for the disposal since the end of September, and net debt-to-EBITDA was said to have ticked up as expected. On the operating side, office like-for-like income rose 6.8% and retail like-for-like income rose 5%; office occupancy was nearly 99% and retail occupancy was almost 97%. Management raised full-year like-for-like income growth guidance to around 4% to 5% from 3% to 4%, and said FY26 EPS should be at the top end of the 2% to 4% guidance range. They also said the QAM disposal reduces reported FY26 earnings by GBP 7 million, and that FY30 EPS potential is now 62p, up from around 60p. They target net debt-to-EBITDA of below 7x within two years, versus the previous target of below 8x, and expect LTV to fall below 35% over time.

Mark Allan framed the quarter as evidence that Landsec’s strategy is working: own the best assets, push capital toward higher-return major retail, and reduce lower-return exposure. He said customer demand for high-quality office and retail space is still strong, with no sign of abating, and that this is driving reversionary rental growth and occupancy at a decade high. His tone was confident and increasingly specific on execution, especially around the move to a lower-cyclicality portfolio and the decision not to commit meaningful capital to new development in the near term.

Vanessa Simms emphasized that the first half was driven by operating performance and cost control. She said net rental income was up GBP 15 million, like-for-like income contributed GBP 12 million, gross-to-net margin improved by 130 basis points to 87.7%, and overhead costs were down GBP 2 million. She also said average debt maturity remains long at 8.9 years, there is no debt refinancing due until 2027 at the earliest, and that net debt-to-EBITDA is expected to fall below 7x over the next two years as developments complete and lease up. She added that the QAM sale moves residual finance lease income into an upfront cash receipt, reducing FY26 earnings by GBP 7 million and FY27 earnings by a further GBP 15 million.

Analysts focused on whether retail ERV is really catching up with leasing evidence, whether share buybacks could become a better use of capital, and how much flexibility Landsec has if targeted retail acquisitions do not come through. Management said leasing evidence is more important than formal ERV marks and argued that rents are rising because their retail assets are nearly full and sales performance is far ahead of the wider market. On buybacks, Mark Allan said they remain on the framework but that buying major retail is currently more accretive, while buybacks would become more relevant if the company lacked better external opportunities; he also said there is no precise share-price threshold. On residential, he said policy changes could add 50 to 75 basis points to London project yields, but a decision would likely come later in 2026 after more project-level clarity.