Stacy Eden, Head of Real Estate at RSM UK, comments on Land Security Group’s (Landsec) half year results: “Landsec’s results demonstrate an element of resilience across its commercial property portfolio. Office values rose by 0.4% and retail values by 2.5% in the six months to 30 September 2026, with overall values rising 0.8%. However, this is on the back of an estimated rental value growth of 2.9%, so the results unfortunately do show a continued downward pressure on capital values, particularly within the office market where strong rental growth led to minimal valuation increases."

“While rental growth in the office and retail market amongst prime properties is reasonably strong, the challenging economic environment is impacting yields. And with concerns around cyclical downturns in the office market, the company’s strategy is focusing on greater diversification to secure long-term growth.

“As it looks to secure a more stable growth trajectory and reduce its reliance on the London office market, Landsec is placing its bets on residential and, to a smaller effect, retail opportunities. This move could significantly bolster the company’s resilience against market fluctuations and uncertainties, by establishing a more balanced portfolio across sub sectors, which typically demonstrate a more consistent performance.

“While this marks a significant shift away from Landsec’s historically office-heavy portfolio, it follows patterns seen across the US real estate market, where diversification away from office towards residential and retail is growing in popularity. The question now lies in whether this move will successfully stimulate long-term growth for Landsec. If so, it could pave the way for other commercial-focused companies to follow suit and turn their attention to the residential market.”

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