Land Securities Group plc (LAND) Q2 2024 Earnings Call

Investor webinar replay

Replay transcript excerpt

Welcome to the presentation of Landsat's 2023 half-year results. Now, it's been three years since we launched our new strategy based on two clear and simple principles. Focus our resources where we have genuine and sustainable competitive advantage and maintain a strong balance sheet. Our consistent focus on these two principles means that we remain in excellent shape. Three years ago, interest rates were at historic lows, liquidity was high, so property yields in many sectors were at or near all-time lows. But economic and financial market conditions have, of course, changed considerably since then. And one year ago, we set out a clear view that rates would likely remain higher for longer, and that property values would need to adjust to that new reality. And we acted on this early by selling 1.4 billion of long-let offices last year. And that brought total disposals of mature offices and assets in subscale sectors since late 2020 to 2.5 billion. As investment activity remains subdued, the adjustment to this new high-rate reality continues. But, encouragingly, inflation has come down from its recent highs and long-term rates have started to stabilise. So, if this persists, we expect the outlook for values for the best assets to improve in 2024. And from a customer perspective, we remain focused on ensuring that we anticipate, we understand and respond to their evolving needs. We said that we expected the best-in-class retail space to recover post the significant reset of the pandemic. And that we were planning for overall demand for conventional office space to reduce. with the biggest impact likely to be in large headquarter type space and locations which offer limited appeal to staff. And on both, this seems to be largely what is happening. And our high quality po...