Landsec is to launch a major investment drive across its retail destinations that will see unused retail replaced with food and beverage and leisure.
The initiative will be announced on Wednesday at a retail-focused capital markets update. It will be led by a £45 million investment plan for Gunwharf Quays, its 550,000-square-foot retail-led centre in Portsmouth.
There will also be investments in its major shopping centres at Trinity Leeds and St David’s in Cardiff, which the real estate investment trust says will be "accretive to overall returns".
The "transformation plan" at Gunwharf Quays will improve the look and feel of the centre, Landsec says, and create a "more memorable experience for visitors, attract guests from further afield and deliver more value for brand partners". The REIT says the investment will increase turnover at the site by more than a third over the next five years.
At St David’s, Landsec is investing in a place-making initiative it says will improve guest experience and increase the time consumers spend at the destination. As part of the plan, it intends to remove 160,000 square feet of vacant retail, previously a Debenhams store, as well as create a new city square and introduce 30,000 square feet of new food and beverage and leisure offerings.
At Trinity Leeds, Landsec will repurpose underused retail space to create a 70,000-square-foot hospitality destination, with food and leisure at its heart.
Bruce Findlay, managing director, retail at Landsec, said: “We’re focusing our strategic investment on where we can drive growth and deliver attractive returns. Our prime, catchment-dominant retail destinations have recovered strongly since COVID and, through targeted investment, we’re ensuring they will remain in demand in the future for consumers and brands alike. We’re confident that best-in-class retail property can deliver high-single digit to low-double-digit total returns in the current macro-economic environment.”
Landsec has been pressing on with a strategy to sell around £4 billion of mature assets and assets in sectors its sees as non-core, such as retail parks and leisure as well as some London offices, and reinvesting in growth opportunities. It has sold around £2 billion over the past two years.
Its major retail destinations have seen strong leasing as they return to growth, according to its recent results.
Speaking to CoStar News at the results chief executive Mark Allan said the investment opportunities the REIT is considering are the "great pipeline particularly London offices where people have held back on new developments" and retail "looks very interesting".
He added: "We are most of the way through the reset of retail rents to lower rents. This sector will return to structural growth and we are proactive in allocating capital growth to this sector."