Landsec offloads £617m worth of retail and hotel assets
Landsec has completed £617m worth of non-core asset disposals since September, including the sale of some retail centres and its entire hotel portfolio.
The disposals included, amongst others, the sale of two retail outlets, one retail park, two leisure assets and a local shopping centre in London for a total of £217m.
This comes as the real estate investment trust completes the sale of all of its hotel assets to funds managed by Ares Management, alongside its operating partner EQ Group, for a cash consideration of £400m.
Landsec said the disposal is in line with its strategy to release capital from sectors in which it does not have scale and to focus its resources on areas where it has a competitive advantage.
The hotel portfolio – which comprises 21 assets and is fully let to AccorInvest – generated a 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, which Landsec said limits its ability to influence performance or add further value to the assets.
Of the £400m consideration, £350m has been received on completion, with the remaining £50m payable within 24 months. Landsec will receive 6% interest per annum on the outstanding balance. The group said the net proceeds of the sale will initially be used to repay debt.
Combined, the transactions bring Landsec’s total disposals since September 2023 to £617m. In comparison, the group has made £46m of acquisitions since then, comprising a handful of smaller site assembly opportunities adjacent to existing assets.
Mark Allan, chief executive of 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.”