Land Securities scraps dividend, sets up £80m rent relief fund

Land Securities has cancelled its dividend to conserve cash and set up an £80m rent relief fund for customers struggling during the coronavirus crisis.

Britain's biggest listed commercial property company said the coronavirus pandemic started to hit its business in mid-March and that after the government told retail and leisure businesses to close nearly all stores at its shopping and leisure assets had shut.

Just 65% of rent due on 25 March was paid by the end of the month compared with 96% a year earlier, Land Securities said.

Land Securities has cancelled its third interim dividend, due to be paid on 9 April, to conserve cash. The company said it had net cash and available facilities of £1.21bn. With the commercial paper market seized up it has applied to the Bank of England to use the Covid corporate financing facility.

The FTSE 100 company said it could withstand a valuation fall of 62% or a £385m drop in earnings before its covenants prevent further bank drawings.

Martin Greenslade, Land Securities' chief executive, said: "Landsec is in a robust financial position … However, the impact of CV-19 on our business and on market conditions continues to evolve. As a result, the board has taken a prudent decision to cancel our third interim dividend and will regularly review the position on future dividends as the situation develops."

Land Securities said it was trying to support its customers during the crisis by agreeing rent deferrals with many retail and leisure tenants. It has also set up an £80m fund to help customers most in need. About £15m will go to food and beverage customers with the rest going to small and medium sized businesses.

The company will also give £500,000 in grants to homeless charities and other causes.

"These are unprecedented times and it is incumbent upon businesses such as ours to be mindful of the huge challenges faced by many of our stakeholders," Greenslade said. "We recognise that the long term success of Landsec is reliant on our customers, employees and the communities in which we operate."