Land Securities reported a rise in first-half net profit to £859.8m, or 182.51p a share, from £829.2m, or 176.46p a share, a year ago.
The company’s net asset value per share climbed 10.9% to 2,121p in the six months to 30 September 30 driven by a 7.3% valuation surplus from the group’s £14bn investment portfolio.
Land Securities said that the outlook remained positive and the prospects for commercial property investment in the UK remain sound.
It added that it would be valuing its qualifying property assets at 31 December in preparation for the introduction of real estate investment trusts into the UK.
Outgoing chairman Peter Birch said: “We have REIT conversion on the horizon which will bring benefits to shareholders in terms of tax efficiencies; we are making excellent progress with our development activities; and we have a high quality investment portfolio with reversionary potential as well as an outsourcing business which is poised for further growth.”
The group, which it emerged this morning had considered making a bid for central London developer London Merchant Securities, also said that it would be returning to more aggressive trading in commercial property as the market moved “closer to equilibrium conditions”.
In the six months to the end of September a drop in trading activity has seen acquisitions worth £478m and disposals of just £176m as the group focused on investing in development.
However, LandSec said that with the number of buyers falling and more properties being put up for sale there was evidence of the market cooling.
“This is likely to herald an end to yield compression, but also to increase the scope for the group to find opportunities where we can create value for shareholders.”
The interim dividend of 19p per share was up 4.7% on the same period last year.
References: EGi News 15/11/06
