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* Landsec's asset value declines during the year
* Co reports $1 bln annual loss
* Shares down 10.6%
(Adds details on market conditions, share move)
By Samantha Machado
May 12 (Reuters) - Property developer Land Securities
on Tuesday reported an annual pretax loss of more than
$1 billion as coronavirus-driven shutdowns left office and
retail space empty, resulting in defaults on rent payments.
The results add to growing signs of stress for property
companies which are facing widespread resistance over rents from
commercial tenants whose businesses have been virtually closed
and are now facing a sharp downturn.
Land Securities' shares, which have fallen 36.1% so far this
year, were down 10.6% to 565.2 pence by 0822 GMT.
The company, which manages the Bluewater Shopping Centre in
southeast England, said its loss widened to 837 million pounds
($1.03 billion) for the full year ended March 31, compared with
a loss of 123 million pounds last year.
Land Securities, one of Britain's biggest commercial
landlords with a portfolio of more than 13 billion pounds, said
only 10% of the office space it owns and rents out to
corporations in London and other cities was currently being
used.
Retail property owners and tenants have been working
together to defer rent payments and find other solutions that
will help shops, businesses and landlords to ride out the crisis
stemming from coronavirus shutdowns.
Land Securities took a 23 million pound provision against
unpaid March rents, and said that it had collected an average of
only 63% of rents in March and April within 10 days of their
falling due.
"The immediate impact of Covid-19 has been particularly
significant on our Retail and Specialist segments," the company
said.
"Only essential services like supermarkets and pharmacies
remain open at our retail destinations, with four of our retail
assets shut completely."
The group's EPRA net asset value (NAV) - which reflects the
value of a company's buildings - was down 11.6% to 1,192 pence.
On its retail properties, which include the Bluewater Shopping
Centre, it was down by more than 20%.
Even before the COVID crisis, Land Securities was taking a
hit from the strained state of Britain's retail landscape,
hammered by the political uncertainties of the past few years
and a shift to online trade.
Land Securities said it expected reduced rental payments to
continue into the new financial year and had introduced a number
of options for its tenants from monthly rents, rent deferrals
and a recently established 80 million pounds rent relief fund.
In one "severe but plausible" scenario for the next year
considered by Land Securities for planning purposes, it said it
had sufficient reserves to handle a 75% reduction in rent
receipts from its retail and specialist tenants and a 20%
reduction from its office tenants.
British retailers suffered their biggest fall in sales since
the 2008 financial crisis in the first half of April, data from
the Confederation of British Industry showed, as COVID-19 kept
shoppers at home and forced store closures.
Many retail firms are also shutting stores to cut costs and
focus on online space, dealing a blow to real estate firms that
get a large chunk of their business from retailers.
($1 = 0.8112 pounds)
(Reporting by Samantha Machado in Bengaluru; editing by
Uttaresh.V and Jane Merriman)
