LAND SECURITIES (LAND) SHARES: 2025 PERFORMANCE IN UK, KEY DRIVERS, MILESTONES AND RISKS —'26 OUTLOOK

How did Land Securities perform in 2025?

Land Securities Group plc (LSE: LAND), one of the UK’s largest commercial property development and investment companies, experienced a notable year in 2025 amid a transitioning property market landscape. Boosted by shifting workplace norms, urban regeneration demand, and cautious investor sentiment, LAND navigated emerging headwinds while executing key strategic pivots in its portfolio.

In terms of stock price, LAND delivered a total shareholder return of approximately +9.8% for 2025, outpacing FTSE 350 Real Estate Index by around 3%. The share price fluctuated between £6.45 and £7.85 during the year, reflecting mixed investor sentiment driven by macroeconomic variables, including inflationary pressures, policy rate changes, and commercial occupancy dynamics.

Operational highlights and financial metrics

• Net Asset Value (NAV): Remained broadly stable at around £10.45 per share, supported by ongoing development gains and asset repositioning in London and select regional hubs.
• Occupancy rates: Average across the portfolio stood at 95.2%, boosted by demand in mixed-use urban projects.
• Loan-to-value (LTV) ratio: Maintained a conservative stance, recorded at 32%, reflecting prudent capital management and debt restructuring.
• Earnings per share (EPS): Adjusted EPS was £0.51, up 6.1% on 2024, driven by rental recovery and new lettings in prime London assets.

Dividend performance

Land Securities maintained its position as a reliable income payer. The full-year dividend for 2025 was 39.6p per share, representing a 4% increase on the prior year, driven by resilient cash flows and a stable asset base.

Sector comparison and investor perception

LAND shares outperformed some peers in the mid-cap property sector. Firms with heavy exposure to retail-only property slightly lagged, while mixed-use developers and office landlords with modern energy-efficient portfolios drew institutional confidence. Land Securities’ diversified approach, particularly its investment in vibrant, well-connected mixed developments such as Southbank Place and Mayfield Manchester, acted as a buffer against market cyclicalities.

Environmental, Social and Governance (ESG) progress

MARKED ESG milestones included improved GRESB scores and progress on its net zero commitment. The group reduced its carbon intensity by 19% year-over-year, aligning with its 2030 environmental targets. Stakeholders increasingly view ESG-forward portfolios as resilient over longer investment cycles.

2025, while not without volatility, laid a solid base for Land Securities to build upon through 2026, especially as the market sentiment capsizes from caution to cautious optimism around interest rates and economic growth trends.

Core catalysts behind LAND’s performance

The robust performance of Land Securities shares in 2025 was underpinned by a mix of macroeconomic shifts, internal portfolio evolution, and policy trends favouring urban regeneration. As investor demand rebounded selectively across the UK property sector, specific drivers helped shore up confidence in the company’s strategic direction.

1. Focus on mixed-use and urban redevelopment

A cornerstone of Land Securities’ growth during the year was its strategic emphasis on mixed-use urban regeneration projects. The progression of key schemes in London (Nova East, Bankside Yards Phase II) and Manchester (Mayfield) provided visible NAV accretion and longer-term rental yield potential.

Tenant demand for high-quality, sustainable, and accessible locations saw stronger than expected absorption rates, with major pre-lettings to government agencies and corporates bolstering cash flow certainty over the medium term.

2. Portfolio repositioning amid structural shifts

Recognising the secular trend away from obsolete office space, Land Securities actively disposed of lower-performing suburban assets and reinvested proceeds in Grade A developments with higher ESG credentials. Notably, acquisitions in Cambridge and Oxford clusters exposed the portfolio to life sciences and tech-focused occupiers, a lucrative and growing tenant base post-pandemic.

3. Supportive capital markets and refinancing

A stabilising interest rate environment further aided refinancing options. LAND’s proactive liabilities management included issuing £400 million of green bonds at favourable rates, extending average debt maturity to 9.2 years and reinforcing its green finance credentials. This allowed for investment in asset improvements without hampering dividend policies.

4. Government policies on levelling-up and regeneration

UK Government initiatives targeting urban levelling-up and infrastructure improvement dovetailed with Land Securities’ project pipeline. Announcements around transport upgrades and funding for brownfield site development increased investor appetite for regeneration-linked property developers like LAND.

5. Technology and innovation in property management

Integration of digital twin technology, AI-backed energy optimisation, and tenant experience platforms enabled operational efficiencies, reduced costs, and improved tenant satisfaction. These innovations contributed to rental retention and margin improvement across the property lifecycle.

6. Strong leadership and strategic clarity

Under CEO Mark Allan, Land Securities demonstrated strategic consistency, focusing on core growth pillars without overexposing to speculative markets. Regular investor updates increased transparency, while clear earnings guidance contributed to share price stability throughout the year.

Each of these drivers formed a mutually reinforcing foundation, enabling Land Securities to transition from a reactive post-pandemic stance to a more proactive, value-orientated approach in 2025.

What to anticipate in 2026?

As we shift focus toward 2026, several thematic and company-specific risks emerge that could either propel or derail Land Securities’ share performance. While cautious optimism surrounds macroeconomic stabilisation and occupancy recovery, uncertainties across interest rates, political shifts, and tenant dynamics remain paramount.

1. Macroeconomic pressures and interest rate sensitivity

Although the Bank of England paused interest rate hikes in late 2025, markets remain wary. Should inflation revisions trigger rate increases in early 2026, property investment sentiment may decline. As a capital-intensive business, Land Securities remains exposed to the directional tone of monetary policy, which could affect debt costs and cap rates.

2. Office space demand and hybrid work transition

The ongoing evolution of hybrid work will continue to shape office valuations and leasing velocity. While Grade A spaces in city centres have held up well, demand in fringe zones or older properties may continue to decline. LAND’s efforts to reposition such assets needs to be monitored for execution efficiency and tenant uptake.

3. Political uncertainty and regulatory environment

2026 coincides with a likely General Election in the UK, potentially altering planning laws, housing policies and fiscal regimes affecting property valuation. Any abrupt policy shifts could introduce permit delays, tax changes, or investment freezes in regeneration-heavy schemes.

4. ESG implementation challenges

Despite progress in sustainability, ESG compliance costs may inflate if regulatory mandates tighten. Upgrading to meet EPC and BREEAM standards across older stock may pose margin compression risks. The success of Land Securities’ environmental roadmap depends on consistent execution and cost control.

5. Competition from REIT peers and global asset allocators

With global capital seeking stable returns amid bond volatility, competition in London and Tier 1 cities could intensify. Domestic and international REITs, sovereign wealth funds, and private equity are all targeting similar segments. Land Securities’ ability to secure attractive assets without overpaying becomes critical in this context.

6. Technological disruption and leasing automation

While innovation is currently a tailwind, lagging adaptation may reverse the trend. The emergence of AI tools in real estate valuation, tenant acquisition, and asset management could benefit early adopters. LAND must stay agile and continually invest in proptech capabilities to remain competitive.

Market consensus and valuation outlook

Analyst sentiment for 2026 remains moderately positive, with consensus price targets ranging between £7.75 and £8.50. Dividend continuity is expected, and NAV growth depends on letting traction across new development phases. The shares currently trade at a 19% discount to NAV, indicating potential upside if execution aligns with market timing.

Overall, 2026 presents both opportunity and challenge. Investors should monitor key planning decisions, leasing updates, macroeconomic data, and political developments as they consider their LAND positioning.