Britain's Landsec to invest $2 billion in mixed-use spaces bet

By Aby Jose Koilparambil

(Reuters) - Land Securities plans to triple the share of mixed-use properties in its portfolio by 2027 with an investment of 1.5 billion pounds ($2 billion), the company said on Thursday, adding that it targets building thousands of homes.

Britain's largest commercial landlord is aiming to increase the share of mixed-use properties in its business to 25% from the current 8% through projects that will build some 7,000 homes and three million square feet of office space, Chief Executive Mark Allan told reporters on a conference call.

The group's plans are part of a growth strategy announced in 2020 that involves adding more mixed-use spaces — where offices co-exist alongside shops, homes and restaurants — as it reduces its reliance on a Central London office portfolio amid a fall in rent levels and valuations during the COVID-19 pandemic.

"At the moment, we have very few residential units as a business and it is an area that we see as a growth opportunity through our mixed-used business over the next five-plus years," Allan said.

Landsec's strategy also comes as Britain grapples with an under-supplied housing market, where house prices have sky-rocketed thanks to robust demand.

The FTSE 100 firm is planning to develop about 1,800 homes in the O2 Shopping Centre and some 2,200 more at the Lewisham Shopping Centre, both in London.

Allan said the company would continue to sell properties from its Central London office portfolio in the near term and that the share of such properties in Landsec's business is likely to drop to 55% from the current 64% by 2027.

($1 = 0.7366 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; editing by Uttaresh.V)