‘Retail administrations lead to lower rents’

The Trinity Leeds shopping centre
The Trinity Leeds shopping centre
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THE company behind Trinity Leeds said the shopping centre has been affected by administrations among some retailers, which has resulted in lower rents.

Land Securities said a boom in demand for commercial property had boosted its net asset value, and it was among the top performers on the bluechip FTSE-100 index.

However, Land Securities said that rental values at its completed developments decreased marginally due to Trinity Leeds, where retailer administrations led to some lower appraised rents.

Commenting on net rental income, the company said: “At our completed developments, Trinity Leeds and The Bishop Centre, Taplow, income increased by £3.7m while net rental income from our like-for-like properties was virtually unchanged.”

Land Securities was unable to provide a spokesman to discuss the performance of Trinity Leeds, but the company said in a statement: “With regards to administrations, across Land Securities’ portfolios, the retailers which went into administration last year had been on our high risk list and therefore we were well prepared and are working on solutions for these units – both at Trinity Leeds and elsewhere.”

Earlier this month, it was announced that The Hip Store independent boutique will move out of Trinity Leeds to premises in Vicar Lane in Leeds.

In the statement, Land Securities said that its White Rose Centre, which is near Leeds, was one of the top performers in Land Securities’ £6.3bn retail portfolio.

Earlier this month, it was revealed that Land Securities had appointed a successor to Gerald Jennings, its former portfolio director for Trinity Leeds and White Rose. However, the new post is based in London rather than Yorkshire.

Rob Jewell, a former professional rugby player, is overseeing the two Leeds shopping centres as well as Buchanan Galleries in Glasgow.

A spokeswoman for the firm said Mr Jewell “will be based in London but in Leeds on a regular basis”.

Mr Jennings stepped down as portfolio director earlier this year after a long career with Land Securities, to focus on his new role as President of the Leeds Chamber of Commerce.

The company said its adjusted diluted net asset value - a key measure for developers because as reflects the value of their buildings - rose 27.6 per cent to 1,293 pence per share in the year ended March 31. It raised its dividend to 31.85 pence from 30.7 pence.

Companies are quickly snapping up rented office spaces in London and other UK cities, because they feel more confident about economic growth. Land Securities, however, said it would not add to its speculative development programme that ends in July 2016. Its rival British Land said last week that it expected to spend £378m ($590m) on development over the next three years.

“We’re in a position where we don’t think we’d be adding new speculative development stuff, because we’re competing with a crowd of people; and that just means that the risk dynamics changes,” chief executive Robert Noel said.

Land Securities and British Land were the first companies to build speculatively after construction plummeted during the downturn.

IN a trading update issued in January, Land Securities said the Trinity Leeds and White Rose shopping centres both performed strongly over Christmas, despite the increasing challenge from online retail.

Land Securities reported a rush of leasing activity at the £400m Trinity Leeds centre in the build- up to Christmas, with Love Aroma, DKNY MEN, Cabana, Caffe Nero, Hind, Doc Barnet, Trade Nation and House of CB among the new openings.

Both shopping centres are planning to beef up their leisure offer in a bid to attract more customers and prevent them from switching to online shopping.