Real estate giant Land Securities has hiked its guidance for the year as it shifts away from office developments to retail sites and building more homes.
Bosses reported “clear positive momentum” across the company, despite wider pressures in the economy.
Land Securities (Landsec) told shareholders it is on track to deliver growth in net rental income of between 4% and 5% this financial year, having previously guided to between 3% and 4%.
It also said it is set to post earnings per share at the “top end” of previous targets.
The group said earnings per share rose by 3.2% over the past half-year on the back of a 5.2% rise in like-for-like income and a boost from reductions in overhead costs.
However, the Bluewater majority owner also revealed pre-tax profits slumped to £98 million for the six months to September 30, compared with £243 million a year earlier, amid losses linked to the sale of assets.
The company noted a roughly £67 million loss linked to the sale of £644 million of assets “which generated little or no return”.
This included the sale of four retail parks, including Lakeside in Thurrock, for around £261 million.
Landsec also struck a £245 million deal to sell the Queen Anne’s Mansions office development, which is set to close next month, amid a strategy to reduce its investment in the office market.
The company said it complete two new office developments in the coming months and has around £200 million of further investment earmarked for the sector but does “not intend to add meaningfully to this in the next 12-18 months”.
It said it will “prioritise acquisition opportunities in retail”, following recent deals to grow its stakes in popular retail destinations, such as Bluewater and Liverpool One.
Landsec also said it has made further early progress in efforts to establish a residential operation worth £2 billion or more.
It has a resolution to grant detailed planning consent for the first 879 homes at its Mayfield site in Manchester and is also pushing forward with plans for a 2,800 home development in Lewisham.
Mark Allan, the chief executive, said: “We continue to see clear positive momentum across every part of our business, notwithstanding the wider economic environment.
“Owning the right real estate has never been more important, so we continue to benefit from our proactive portfolio repositioning over the last few years, and our entire business is also benefiting from a sharper focus on sustainable EPS (earnings per share) growth as our primary performance objective, providing greater clarity in terms of priorities and decision-making.”