Land Securities swings to an £840 million annual pre-tax loss in fiscal 2020

Land Securities Group (LON: LAND) released its financial report on Tuesday that posted an £840 million annual pre-tax loss. The company attributed its downbeat performance to the Coronavirus pandemic that fuelled defaults and made it increasingly difficult for tenants to pay rent. The retail market, the company added, also took a massive hit as the health crisis pushed multiple stores into closure.  

On the revenue front, Land Securities printed £741 million that came in lower than £757 million last year. In the eleven months that ended on 31^st March, the company reported a 1.2% decline in footfall at outlets. The FTSE 100 company’s annual loss was capped at £123 million in fiscal 2019.

Land Securities establishes an £80 million rent relief fund

In a bid to cushion the economic blow from the Coronavirus pandemic that has so far infected more than 223,000 people in the United Kingdom and caused over 32,000 deaths, rental property owners have been working with tenants to postpone rent payments and explore alternative solutions for businesses, shops, and landlords to survive the crisis.  

The UK's largest property developer also highlighted to have established a rent relief fund. The £80 million fund is aimed at supporting occupiers that are financially struggling due to the pandemic. The company’s board also agreed to a 20% cut on base salary for 3 months.

On top of COVID-19 impact, structural changes and struggling retail environment also resulted in a decline in the value of Land Securities’ assets. As per the Confederation of British Industry’s data, the countrywide retailers saw the steepest decrease in sales since the market crash of 2008 in the 1^st two weeks of April as the outbreak restricted shoppers to their homes.

Land Securities reports a 20.5% decline in the retail segment

The retail market is a prominent source of income for real estate firms. With retailers closing stores in the UK and focusing on e-commerce, real estate companies are taking an unparalleled hit due to the Coronavirus pandemic. Land Securities reported a 20.5% decline in its retail segment in fiscal 2020.

According to Land Securities, its EPRA NAV (net asset value) came in 11.6% lower to 1,192 pence.

Land Securities is currently around 45% down year to date in the stock market. Its performance in 2019, on the contrary, was reported fairly upbeat with an annual gain of roughly 22%.

At the time of writing, the Bluewater Shopping Centre manager has a market cap of £3.97 billion.