Yahoo Finance Land Securities to resume dividend payout
Property firm Land Securities is to restart dividend payments after saying it is in a sound financial position - despite a slump in rent collection when tenants were hammered by lockdown.
The FTSE 100 firm - which owns a £12.8bn portfolio of office, leisure and retail property around the UK, including Brighton Marina and the Novotel Glasgow Centre - said it has £1.2bn available in cash and overdrafts, and has cut its debt pile slightly to £3.9bn.
Landsec now plans to make a pay-out to shareholders following half-year results on November 10. It had scrapped the dividend in April to preserve costs during the crisis.
The firm is restarting operations despite collecting only 60pc of quarterly rent due at the end of June. It was expecting £109m when deferrals and concessions were taken into account, but collected £65m.
That was mostly due to retail tenants, who overall paid just 29pc of what they owed. Office tenants stumped up 81pc. Three-quarters of rent due for the March quarter has now been received.
Landsec reported encouraging levels of footfall in its centres, and said there are signs that office occupancy is recovering as restrictions are lifted.
All of the company's offices are now open, while almost four-fifths of retail outlets were trading by the end of June. Its shopping centres include the Westgate in Oxford, the Trinity in Leeds and West 12 in Shepherds Bush.
Footfall during the two-weeks since non-essential retail opened on June 15 was 60pc of the level during the same period last year, while store sales were 80pc of normal levels. Average transaction values were up 22pc, suggesting customers are making fewer trips but spending more each time to minimise journeys away from home.
Commercial landlords have been hammered by the coronavirus lockdown, with figures published this week by Remit Consulting showing they were paid 37.8pc of quarterly rent owed on last week’s due date, and 33pc of service charges.
Industry leaders have raised concerns that protections for tenants such as a temporary ban on winding-up petitions have led to some firms choosing not to pay even though they could afford it.
Shopping centre owner Capital and Regional this morning reported it had collected only one-third of rents for the June quarter, with footfall in its centres was down 45pc last week compared to the same period in 2019. Bosses hinted that they could take legal action against companies which are able to cough up but refusing to do so.
It said: “Approaching half of the balance of rents that are outstanding are due from major well-capitalised retailers who have capacity and a clear contractual obligation to pay.
"It is encouraging that several of the non payers have engaged with us regarding payments now stores are trading".
Capital and Regional owns shopping centres in Blackburn, Hemel Hempstead, Ilford, Luton, Maidstone, Walthamstow and Wood Green. Shares rose 3pc.
Analysts at Peel Hunt said Landsec’s dividend announcement came a quarter ahead of expectations.
AJ Bell also welcomed the move. Russ Mould, investment director, said: “The Restoration of the monarchy under King Charles II is seen by many historians as the end of the joyless times of the Commonwealth and a return to jollier ones under Old Rowley and his merry gang of courtiers.
"Equity investors will be hoping that Land Securities’ decision to restore its dividend in 2020 is a sign of better times to come for stock markets."
Shares rose 2.7pc to 589p but the stock was close to £10 at the start of the year.
