Commercial property investor Land Securities (LAND) said it had seen ‘encouraging’ levels of footfall since its centres were reopened in mid-June, with like-for-like sales at about 80% of the same period last year.

The shares were up 2.8% as this resilient performance was accompanied by a plan to resume dividends alongside first half results in November.

In England, for the two-week period since non-essential retail opened on 15 June, footfall in its centres was 60% of the level achieved for the same period a year ago and like-for-like store sales were 80% of the level achieved last year.

Over the same two-week period, average transaction values were up 22%. The company also said it had a collected about 60% of rent due on 24 June.

In its office estate, the company had seen 'early signs' of growing occupancy as customers returned to work.

Construction, meanwhile, continued at its committed development scheme at 21 Moorfields, EC2, it added.

SITES REOPENING

As at 30 June, 79% of the retail units were trading and 16 of our 18 leisure parks were open. Its Accor managed hotels remained closed to the general public, but it will phase the opening of the hotels over the next three months.

AJ Bell investment director Russ Mould said: ‘Were reports of the demise of traditional commercial property investing premature? The flagged resumption of dividends at Land Securities, which invests mainly in offices and retail assets, suggests they may have been.

‘The fact like-for-like sales at its shopping centres were at 80% of their levels a year ago in the two weeks since non-essential retail reopened in England is testament to the resilience of the UK consumer.

‘And with 60% of rent due on 24 June paid within five working days the company clearly feels able to pay a dividend of some description alongside first half results in November.’

Mould added: ‘Notably 81% of rent from office tenants was paid within this window compared with only 29% of retail. This is still a much better income situation than the 16% tally announced by retail property specialist Hammerson earlier in the week.

‘The confidence Land Securities has signalled by restarting dividends is also an indication that office assets might prove more durable than feared.’

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Issue Date: 03 Jul 2020