Landsec has announced it will shift its focus to residential instead of office blocks with plans to establish a new platform by 2030.
The £2billion new residential platform will see the developer focus its investment on large-scale housing schemes in both London and Manchester.
It will kick-start its new direction with three major residential-led projects set to begin on-site in late 2026 which will deliver over 6,000 homes.
One of the schemes will be located on Finchley Road in North London, where demolition and enabling works have already been carried out for phase one of a 1,800-home development. Planning has been granted for the initial 600 homes, with a variation decision expected later this year.
Landsec is also awaiting planning approval for a 2,800-home scheme in Lewisham, South East London, which will include both co-living and student accommodation.
The developer has also restructured its agreement with its joint venture partners at its Mayfield site in Manchester, which could potentially deliver in the region of 1,700 homes. Planning approval is expected to be received for the first 879 homes in the second half of the year.
To fund the switch to residential, Landsec plans to recycle £3billion of capital from its offices and non-core assets as well as a further £1billion of retail acquisitions.
Mark Allan, chief executive of Landsec, said: “Our capital allocation decisions from here are about ensuring that the growth outlook for our portfolio in three to five years’ time is as positive as it is for our current portfolio today.
“That is why we have set out a clear plan to increase investment in major retail by a further £1billion and establish a £2billion+ residential platform by 2030, to be funded by rotating £3billion of capital out of offices.”
Landsec expects gross yields from its housing schemes of around 6.5% and net yields of 4.8-5.5%.
Landsec also announced that it has committed £600million to top-tier retail assets such as Bluewater in Dartford and Liverpool ONE. It will also target a further £1billion of investment in shopping destinations where yields are in the region of 7-8%.
