Landsec saw the value of its portfolio rise by £81M in the six months to the end of September, compared to a £945M drop in the same period the year before, as Chief Executive Mark Allan attempts to turn the retail and office giant into a mixed-use earner.

The half-year results come two weeks after Allan propelled Landsec into the Manchester market, acquiring 75% of the MediaCity office, leisure and residential scheme in Salford Quays in a £426M deal; and making a £190M offer for U+I, which is the private sector partner in the £1.4B Mayfield office and residential scheme in Manchester.

MediaCity is likely to see a £500M investment in new development from early 2023, with £600 to £800M pumped into development at Mayfield from 2022, the results document said. Combined with the purchase prices of the two schemes this amounts to a £2B punt on Manchester's mixed-use prospects.

Earnings per share in the six months to the end of September were up 56.8% to 24.3p, and the dividend in the period is 15.5p per share.

The portfolio valuation is £11B, and leverage was down slightly at 31.8%. Adjusted net debt is £3.5B. Disposals totalled £250M and acquisitions £616M.

Disposals included the sale of Docklands offices at 6-9 Harbour Exchange, E14, in November to Blackstone European Property Income Fund for £197M, a net initial yield of 3.99%.

Landsec said that the past six months provided further evidence of prime retail rents stabilising, with a significant increase in leasing activity: 181 lettings were completed or are in solicitors' hands, with rents 3.3% ahead of ERV. Key leasing deals within the period included Amazon 4-star, its first store of this type in the UK.

“When we launched our strategy in October 2020 we were clear in our intent to focus on three key areas — central London offices, major retail destinations and mixed-use urban neighbourhoods; areas where we believe we have a sustainable or attainable competitive advantage that will help us create long-term value for all our stakeholders," Chief Executive Mark Allan said. "We were also clear that this would require meaningful asset recycling, with around £4B of asset sales planned over the short to medium-term in order to fund investment into these key focus areas.

“Initially, and in the midst of the pandemic, our priority was disposals and we made good progress in the last financial year. However, with the economy recovering strongly during 2021, we have been able to balance that with more focus on capital reinvestment.

“Our recent £426M investment in MediaCity and our £190M recommended all-cash offer for U+I Group PLC are clear evidence of the steps we are taking in this regard. In both cases, progress against our strategy is accelerated materially.“