Retail and office landlord Land Securities (Landsec) has slumped to loss for the past half-year after the value of its London property empire tumbled.
The company, which owns the Cardinal Place development in central London, said it fell to a £192 million pre-tax loss over the six months to September, compared with a £275 million profit a year earlier.
Landsec told investors its portfolio saw its value tumbled by £323 million, or 2.9%, to £10.9 billion, driven by weakness in Central London.
Valuations in the firm’s City of London office portfolio slid by 9.7%, while it saw a 4.2% drop in properties in the West End.
It also came as higher bond yields, driven by interest rate hikes over the year, weighed on the commercial property market.
The commercial property firm said its pace of reinvestment is likely to slow over the next year amid the uncertain economic backdrop.
It said it is “difficult” to say where interest rates will settle but told shareholders the company is “in excellent shape for any eventuality”.
Landsec, which owns a 49% stake in the Bluewater shopping centre, said its retail portfolio has recorded a 6.3% increase on sales against last year, with like-for-like sales ahead of pre-pandemic levels.
Chief executive Mark Allan said: “Our competitive advantages remain our high-quality portfolio, our strong customer relationships and the ability to unlock complex opportunities through our unique expertise, all of which is evidenced by our strong operational performance in the half year.”
Shares in the company moved 1.7% lower to 613.2p in early trading on Tuesday.