Land Securities plans significant investment in prime shopping centres, allocating nearly £600 million for purchases.
- Major shopping malls remain a focal point for Land Securities, contrasting with other landlords’ hesitance in the market.
- CEO Mark Allan affirms commitment to acquiring top 1% shopping centres, citing their enduring value.
- Rents for ‘prime’ centres have dipped but are on the rise again, supporting Landsec’s strategic moves.
- Frasers Group also expands its portfolio, reflecting a broader trend towards more substantial retail investments.
Land Securities has earmarked the majority of £600 million with a strategic vision to expand its holdings in prime shopping centres. While many landlords have veered away from acquiring large malls, Landsec remains steadfast in its belief that the best ‘destination’ malls retain their relevance. This investment is indicative of their confidence in the future of high-quality retail locations.
CEO Mark Allan has articulated a clear strategy for Landsec, focusing exclusively on acquiring the top 1% of shopping centres. ‘What we’re not trying to do is buy up various shopping centres that aren’t in that top 1%,’ Allan asserts. His belief in the potential of these malls is based on the prohibitive costs of constructing new centres and the continued concentration of retailers and shoppers in existing, dominant locations.
Recent trends show a decline in rents for prime shopping centres by about one-third from their 2016 peak. However, these rents are beginning to climb once again. This resurgence lends support to Landsec’s strategy, as prime assets are once more garnering significant attention and investment. Allan notes, ‘Whether it’s brilliantly located central London offices with great sustainability credentials or catchment-dominant major retail destinations, the theme is the same: best-in-class assets are materially outperforming.’
Other industry players, such as Frasers Group, are also expanding their retail portfolios. Frasers has recently acquired a trio of prominent malls across the UK, doubling down on its property investments. This move by Frasers underscores a trend among major firms to strengthen their grip on lucrative retail properties, signalling a robust confidence in the sector’s potential.
Land Securities’ decisive investment strategy underscores its confidence in the enduring value of prime retail destinations.
