Landsec’s spending on London office work set to shrink further

Landsec has said it expects to complete its remaining London office schemes in the next few months with “no plans” to begin any more “as things stand”.

The developer has been pulling back from one of its historic core markets with several planned jobs, including 55 Old Broad Street and Hill House, stalled as a result.

In an update accompanying its 2025 results this morning, the firm said its capital expenditure on schemes by the summer would be just £185m with its London office programme “completing in the next few months”.

It added: “This means our development exposure will be less than 2% of our portfolio in a few months’ time, with no plans to add much to this in the next c. 18 months.”

Mace recently completed its Timber Square scheme, due to be the new home of BP, in Southwark while McLaren is set to finish off its Thirty High development in Victoria over the summer.

Landsec said that it had several ongoing smaller jobs including work at the Bluewater shopping centre in Essex but its only committed office scheme was a £154m deal Bowmer & Kirkland is working on at its Mayfield development in Manchester.

“Our total committed development capex is down to £185m,” it said, adding: “We have no plans to commit further capital to speculative office development as things stand.”

Keltbray has been on site since the start of the year tearing down the existing block at 55 Old Broad Street with that scheme given a fresh lease of life after the developer struck a funding deal with partner Ashby Capital, a private equity firm specialising in real estate, at the end of last year.

But the scheme, due to be built by Skanska and which involves building a 24-storey tower designed by Fletcher Priest, remains up in the air – as does another Skanska job in the City called Hill House although speculation has grown in recent weeks this job might be about to get going again.

Last year, Landsec sold the stalled Red Lion Court scheme to a Stanhope joint venture with this job now renamed Row One and being built by Mace. It also sold a site near the Barbican called 140 Aldersgate to JP Morgan with the plans by Gensler to refurbish it due to be sent in this spring.

Meanwhile, Landsec said work would start on a series of residential schemes “no earlier than late 2027” and only if “we are able to secure viable returns on these projects”.

The firm has three major housing-led schemes in the pipeline – two in London and one in Manchester.