Land Securities Sees a Future for London Offices in New Strategy

(Bloomberg) — Land Securities Group Plc, one of the U.K.’s biggest real estate investment trusts, signaled confidence in the future of London offices in a strategy set out by new chief executive officer Mark Allan.

The company plans to sell non-core assets including its leisure properties and reinvest the proceeds in developing new offices and mixed-use projects, the company said in a statement Monday. Rental income from existing properties won’t be a key driver of earnings, he said.

“London remains one of the world’s gateway cities and this portfolio represents a good source of liquidity over time, with clear potential to recycle capital out of some assets and reinvest into new growth opportunities,” Allan said in the statement.

The focus on growth through development represents a shift from recent years when former CEO Robert Noel took a cautious approach to new projects, seeking to position the business for a possible downturn. Allan took the helm earlier this year, inheriting a business with long leases and little gearing but with few sizable development projects underway.

The company’s retail portfolio, which has weighed heavily on earnings in recent years, will be “re-imagined” with suburban malls likely to be redeveloped, the statement said.

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