Generating a second income for retirement is a goal many investors share, and a Stocks and Shares ISA offers a flexible, tax-efficient way to achieve it.
Growth and income earned within an ISA are free of tax for life, making it a popular vehicle for building a balanced portfolio of dividend-paying shares.
The key question for any investor is how much capital they actually need to generate around £999 a month in passive income from their portfolio.
Targeting that figure means generating £11,988 a year in income, and the amount of capital required depends heavily on the dividend yield achieved.
At a 4% yield, an investor would need approximately £299,700, while a 5% yield would require around £239,700, and a 6% yield would need roughly £199,800.
The higher the yield, the less capital required, which is why many income investors search the FTSE 100 for high-yielding dividend shares capable of delivering consistent returns year after year.
One stock sometimes overlooked in that search is Land Securities Group (LSE: LAND), also known as Landsec, which owns offices, shopping centres and retail parks across the UK.
The company generates rental income from tenants and capital growth from property sales, and is structured as a real estate investment trust, or REIT.
REITs escape corporation tax provided they distribute at least 90% of their property rental profits to shareholders, which typically results in chunky dividend yields.
Landsec currently yields 6.35%, representing a sizeable income stream, though several challenges facing the Business are worth examining before making any investment decision.
UK commercial property has endured a difficult period, with working from home hitting office demand, online shopping pressuring retail destinations, and elevated interest rates weighing heavily on property shares overall.
The Landsec share price is broadly flat over one year and down 12% over five years, a performance that may concern some investors considering the stock.
Despite those pressures, the business remains profitable, with full-year results showing occupancy rates at a 20-year high, while EPRA earnings have remained broadly stable in recent years.
EPRA earnings came in at £377m, £374m, £371m, £393m and £342m for the years 2025, 2024, 2023, 2022 and 2021 respectively, reflecting a relatively consistent underlying profit performance.
The shares trade on a price-to-earnings ratio of 12.4, which appears modest, though the pressures facing commercial property make it difficult to judge whether that represents genuine value.
If inflation continues to rise because of the Iran conflict, interest rates could stay elevated for longer, which would be bad news for property companies that rely heavily on borrowing.
There are also concerns that parts of the office market may never fully recover following the pandemic-driven shift towards hybrid working patterns.
However, when interest rates do begin to fall, property shares could rebound sharply, meaning investors may simply need patience while collecting dividend income in the meantime.
Landsec appears more attractive as an income holding than a growth play, and may be best balanced within a broader ISA portfolio alongside FTSE 100 shares offering stronger long-term price momentum.
With dividends sheltered from tax inside an ISA, Landsec could nonetheless form a useful part of a strategy designed to build a meaningful and reliable second income stream.