Landsec is, as ever, committed to supporting our customers, service partners and communities.
These are unprecedented times during which Landsec will continue to act in the long term interests of all its stakeholders. At the core of our business is a commitment to support our customers, communities, employees and partners. This will hold true over the coming weeks and months, regardless of the challenges posed by Covid-19.
The impact of Covid-19 on our business is now evident. We have responded quickly to establish teams to support our priorities during this pandemic ranging from employee and customer support, operations and corporate affairs through to internal functions including finance and tech. The health and wellbeing of our people has always been our priority and we were quick to encourage all our office-based staff to work from home from 16 March.
We understand that Covid-19 has made day-to-day operations difficult and complex for our customers, and we support the government’s view that no organisation should be left unable to survive as a result. We strongly believe that business has a role to play in delivering assistance. Our message to customers who are in genuine and immediate financial distress, despite help from the government is clear: we want to hear from you and help where we can. We are therefore establishing a support fund to provide up to £80m of rent relief for customers who need our help most to survive. Around £15m of this fund will support our F&B customers, broadly equivalent to three months’ rent free. The remaining £65m will be allocated on a case by case basis to small and medium sized businesses with a focus on helping those with limited access to other sources of financial assistance. We have a shared interest in ensuring our customers remain in business so that, when the UK emerges from lockdown, our offices and destinations quickly return to the dynamic, thriving places they were.
Where we are unable to offer assistance from our support fund, we will consider requests to defer rents. However, we are unable to do this indefinitely and for all occupiers and we therefore ask our customers who are able to pay to do so promptly, so that we can support as many occupiers as possible. We’re also committed to reducing service charge costs, not only in response to the current situation but also through the work started last year on how we run our sites in the most efficient way possible. We continue to maintain basic operations at the majority of our destinations, even though most stores at our shopping centres, outlets and leisure assets have closed save for essential services including pharmacies and supermarkets. Our office buildings are still operational but on a significantly reduced service as many customers still require access to their spaces.
In light of the extreme market uncertainty the Board believes that conserving liquidity is in the best interests of shareholders. Therefore, the Board has taken the decision to cancel our third interim dividend due to be paid on 9 April 2020 and will regularly review the position on future dividend payments, reinstating them as soon as it is appropriate to do so.
We’re especially determined to help in the communities in which we operate. Our community employment and education programmes - which have, since 2011, helped more than 1,400 people furthest from the job market back into work and engaged thousands of young people about the property industry – are continuing at this crucial time. In addition, in response to the immediate needs of the grass roots charities we support, we are providing financial relief for the charities we know well and who are supporting individuals and communities through these unprecedented times. In the coming months, we will give grants totalling £500,000 to our existing charity partners who are most in need. This will include homeless charities and a £100,000 donation to the property industry charity, LandAid. In addition, our Board of Directors will be waiving 20% of their base salaries or fees for an initial period of three months effective 1 May 2020 and the money will be used to supplement Covid-19 support. Funds will be allocated to charitable causes by our Sustainability Committee, which is responsible for our charitable donations.
Our site teams are also providing practical assistance wherever they can. For example, linking our food retailers in London to local homeless charities we work with, for food donations. In Oxford, Leeds and Cardiff we’re offering free parking to key workers to reduce the number of people who are travelling on public transport. In London, we’re offering space for mobile blood banks and mobile blood transfusion units to reduce the number of visitors to hospitals. We ‘re also offering our sites’ car parks for NHS Covid-19 testing facilities and we’ve offered Public Health England free space on the Piccadilly Lights to share public health information. And we’re establishing virtual volunteering so that our own employees can offer their time and skills to organisations who would like our help.
Our own employees face challenges, too. We know that working from home while having additional caring responsibilities is hard. We are doing everything we can to make working from home a positive experience; from the provision of desk equipment to understanding that being online from 9am – 5pm each day isn’t always going to be possible. We thank our people for their commitment, unwavering dedication and hard work.
Covid-19 means it’s not business as usual. But we remain committed to paying our partners and suppliers on time and in full, in line with government best practice guidelines.
It may be some time before life can return to normal. For us, one thing hasn’t changed. Landsec will respond, as ever, in line with the values we hold as a business; values which override temporary turbulence and form the cornerstone of our promise to our employees, our customers, our partners and our communities.