Land Securities will scale back its large-scale London development in a strategy rethink for the developer.
The company said it was “unlikely” to continue building at scale in London in the near term as it focuses on letting its remaining space.
The statement came as Land Securities revealed a 46 per cent drop in profit in 2014/15.
Pre-tax profit fell from £2.4bn to £1.3bn, with the company blaming “valuation increases [that] were unable to match the sharp increases in the year to March 2015”.
Revenue profit, which excludes valuation movements and one-off items, was up 10 per cent to £326m.
Commenting on the strategy, chief executive Robert Noel said: “With construction largely complete, we are focused on letting our remaining space and giving our customers the best occupier experience.
“We will continue to seed our portfolio with opportunities for the future, although we are unlikely to resume building at scale in London in the near term.”
Mr Noel also issued a warning on the dangers of the UK leaving the EU, saying an exit would drive down occupational demand in the property market.
“In turn, this would lead to falling rental values and a reduction in construction commitments, particularly in London,” he said. “So an exit could be painful for the property industry and those it supports.”
He added: “But there is a higher principle at play here. This is a decision for the British people, not businesses.
“It is up to individuals – including those among our customers, communities and partners – to decide what’s best.
“As guardians of shareholder capital, our responsibility is to position the company so it can thrive whatever the outcome. That’s what we have done.”
- Valuation surplus £907.4m (£2.04bn: 2015)
- Profit before tax £1.34bn (£2.42bn: 2015)
- Dividend 35p (31.85p: 2015)