Land Securities reported encouraging interest in its London development pipeline in a solid set of half-year results released this week.
Chief executive Francis Salway acknowledged that take-up had been muted in 2011 but said letting enquiries across its committed schemes in London, including its joint venture tower at 20 Fenchurch Street, had increased since the summer.
He said: “Large corporates which need to move are recognising that they have little choice, so appetite for the small number of new buildings being delivered continues to be good.”
However, the firm remains circumspect about bringing forward new schemes and has not yet made a decision about a plan for a two-building mixed-use scheme at 30 Old Bailey and 60 Ludgate Hill, where demolition is underway.
“We will make a decision in the next few months on whether we press the button or wait for a prelet or perhaps pause a little, as we have done successfully in the past with Park House. But we are encouraged by preletting discussions.”
He said that the firm was operating in a “changeable and challenging” environment but was “alive to the potential effects of economic uncertainty and changeable sentiment”.
He added: “We have consistently stated that we did not expect to see a straight-line recovery in our market and we see no reason to adjust this outlook.”
The UK’s largest property company posted a 4.5% increase in adjusted net asset value to 863p in the six months to the end of September.
The value of its portfolio rose by 2.1% or £211.5m, to £10.8bn. Developments contributed 6.6% and its London portfolio rose by 2.9% to £5.9bn.
Rival GPE posted a 3.9% valuation surplus, but was less upbeat about the occupational market (see story below).
The firm’s pretax profit fell by 16.8% to £378.9m owing to a year-on-year slowdown in valuation growth. Revenue profit was up by 17.2% to £159.3m on the back of £13m of non-recurring items.
Finance director Martin Greenslade said he expected revenue profit to come off in the second half of the year.
