UK’s commercial property sector faces 'higher for longer' interest rate environment, according to Landsec's CEO

The UK’s commercial property sector is facing a “higher for longer” interest rate environment, according to the chief executive of property giant Landsec.
By Greg Wright
Published 16th May 2023, 13:52 BST

Mark Allan said that, in investment markets, rapidly rising interest rates led to a sharp slowdown in transaction activity and falling asset values as valuation yields rose.

In the year ended March 31 2023, Landsec’s total dividend was up 4.3 per cent to 38.6p per share, in line with an increase in underlying earnings.

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Mr Allan added: “Our strategy is based on two clear and simple principles: focus our resources where we have sustainable competitive advantage and maintain a strong balance sheet. We have done both and, as a result, were able to navigate the challenges of the past twelve months very effectively. Our competitive advantages remain the high quality of our portfolio, the strength of our customer relationships and our ability to unlock complex opportunities.

Mark Allan, Chief Executive of Landsec, commented: "Last year saw the most striking difference in performance between occupational markets and investment markets that I can remember."Mark Allan, Chief Executive of Landsec, commented: "Last year saw the most striking difference in performance between occupational markets and investment markets that I can remember."
Mark Allan, Chief Executive of Landsec, commented: "Last year saw the most striking difference in performance between occupational markets and investment markets that I can remember."

"Looking forward, we expect the combination of a 'higher for longer' interest rate environment and the continuing concentration of customer demand on the very best space to result in exciting opportunities and continued positive rental growth for Landsec. Those competitive advantages will be more important than ever."

Mr Allan said that strong demand for Landsec's “best-in-class space” drove consistently strong leasing, rising occupancy levels and growing rents across all parts of its portfolio.

Related topics:Mark Allan