UK property giant Landsec reported occupancy levels at a 20-year peak while delivering better-than-expected rental income growth. The FTSE 100 landlord posted a 6% rise in net rental income to £295m across its office portfolio, with overall rental income increasing 4.6% across its £10.8bn portfolio.

Office occupancy reached 96.8% while overall occupancy climbed to 98%, up from 97.2% last year. Despite the strong operational performance, pre-tax profit slipped 12% to £347m from £393m. Shares responded positively, rising 1.7% in morning trading.

Chief executive Mark Allan is pivoting toward residential property, planning to sell £2bn of office assets over five years. The company completed £346m of office disposals in 2026, including the £245mn Queen Anne's Mansions sale. Landsec now has planning consent for 879 homes at Mayfield, Manchester and 2,800 homes at Lewisham, London, as it shifts strategy toward steady-income residential investments.

The property portfolio valuation increased 1.2% according to independent assessment, signaling recovery in the commercial real estate market after pandemic-driven uncertainty and rising interest rates hammered valuations across the sector.