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Real estate firm Landsec, which owns the Bluewater shopping centre and a number of other retail destinations, has reported a loss before tax of £835m for the six month period ending 30 September.
It comes after the firm said the impact on its results from unpaid rent and service charges had been “significant”.
Revenue profit for the period decreased by £110m from £225 to £115m which it said was the result of a £118m decrease in net rental income for the period and a £2m increase in net indirect expenses, partly offset by a £10m reduction in net finance expense.
The decrease in net rental income was driven by a £39m reduction in gross rental income and an £85m increase in “bad and doubtful debt provisions reflecting the impact of Covid-19 on turnover rents and cash collections”.
After re-opening, it said its retail outlets recovered “particularly strongly” and, in September, like-for-like sales across the portfolio were less than 10% down on last year despite ongoing capacity constraints.
However, it said its performance in regional shopping centres has been “more varied”, with the decline in like-for-like sales in September ranging from below 10% to almost 40% in areas where recently enhanced local Covid-19 restrictions were in place prior to the second national lockdown.
Overall its combined portfolio declined by 7.7% or £945m to £11.8bn.
Chief executive Mark Allan said: “While today’s results clearly show the impact of the pandemic on our business, Landsec remains in a fundamentally strong position. Together, the high quality of our portfolio and low leverage of our balance sheet provide a solid foundation for executing our growth strategy and creating value for all stakeholders.
“This strength also means we have been able to take a proactive and responsible approach to the challenges of Covid-19, supporting our communities and customers.As we begin to look beyond Covid-19, I am confident the business is well placed to capitalise on opportunities as they emerge.”
He added: “The investment market for high-quality London office assets, such as those owned by Landsec, has remained robust throughout the pandemic and there is little sign of that interest waning.
“Access to this liquidity, coupled with the acquisition and development opportunities that are likely to arise as a result of increased obsolescence of older office stock, as well as the long-term need for urban mixed use regeneration, mean there will be ample opportunity for Landsec to create significant value. We look ahead with a clear strategic direction and are optimistic about the future.”
