REG - Land Sec. Group PLC - Landsec sells assets including hotel portfolio

Land SecuritiesAnnouncement

08/05/2024 12:30

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240508:nRSH6431Na&default-theme=true

RNS Number : 6431N  Land Securities Group PLC  08 May 2024

LAND SECURITIES GROUP PLC ("Landsec")

 

 

Landsec sells £617m of assets since September, including £400m hotel
portfolio

 

 

Landsec announces it has completed the sale of its entire hotel portfolio to
Real Estate funds managed by Ares Management ("Ares") alongside operating
partner EQ Group ("EQ") for a cash consideration of £400m. This compares to a
September 2023 book value of the assets of £404m.

The disposal is in line with Landsec's strategy to release capital from
sectors in which the company does not have scale and to focus its resources on
areas where it has genuine competitive advantage.

The hotel portfolio, which comprises 21 assets, is fully let to AccorInvest
and generated net income of £28.4m over the company's last reported financial
year. The income is 100% turnover-linked with a lease contract expiring in
2091 and 12-yearly tenant-only break options, limiting Landsec's ability to
influence performance or add further value to the assets.

Of the total consideration, £350m has been received on completion with the
remaining £50m payable within 24 months. Landsec will receive 6% interest
p.a. on this outstanding balance, which is ahead of the company's marginal
cost of borrowing. The net proceeds of the sale will initially be used to
repay debt.

Across a number of separate transactions, Landsec has also completed the
disposal of £217m of other non-core assets since the end of September. These
disposals included amongst others the company's two smallest retail outlets,
one retail park, and two leisure assets and a local shopping centre in London.
The combined consideration was in line with the September 2023 book value of
these assets.

 

Combined, these transactions bring Landsec's total disposals since September
2023 to £617m. This compares to £46m of acquisitions since then, comprising
a handful of smaller site assembly opportunities adjacent to existing
assets. All else equal, the resulting £572m of net disposals would reduce
Landsec's 34.4% LTV as of September 2023 by over 3ppt on a pro-forma basis. In
the short term, the substantial amount of disposals will reduce the company's
annualised earnings by c. 4%, ahead of the planned reinvestment of these
disposal proceeds.

 

As Landsec's pro-forma net debt will be £1bn lower than it was in March 2022,
before the material rise in interest rates, the company has substantial
headroom to invest at an attractive point in the cycle.

 

Mark Allan, Chief Executive, Landsec, said: "We said in late 2020 that our
focus would be on areas where we have a genuine competitive advantage. In line
with that strategy, we have continued to recycle capital out of assets where
our ability to add further value is limited. The sale of our hotel portfolio
and other non-core assets will further strengthen our balance sheet and leave
us well placed to take advantage of opportunities in the market as they
arise."

 

Ends

 

 
About Landsec

 

At Landsec, we build and invest in buildings, spaces and partnerships to
create sustainable places, connect communities and realise potential.  We are
one of the largest real estate companies in Europe, with a portfolio of
retail, leisure, workspace and residential hubs. Landsec is shaping a better
future by leading our industry on environmental and social sustainability
while delivering value for our shareholders, great experiences for our guests
and positive change for our communities.

 

Find out more at landsec.com

 

 Please contact:
 Press                     Investors
 Sara Doggett              Edward Thacker
 +44 (0)7834 431258        +44 (0)7887 825869
 sara.doggett@landsec.com  Edward.thacker@landsec.com

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  DISFVLFBZELFBBD