Land Securities announced a 4.5% rise in net asset value to 863p a share in a “slightly better than expected” set of half-year results.
The portfolio value of the UK’s largest property company rose by 2.1% or £211.5m over the first half to the end of September with developments contributing 6.6%.
Chief executive Francis Salway was upbeat about the prospects for the company’s development pipeline, which include its joint venture with Canary Wharf to develop the Walkie Talkie tower in the City, saying that he was encouraged by enquiries.
He said: “We are operating in a challenging environment and we expect pressures in managing occupancy rates to continue.
“However, we have been encouraged by our first-half performance and by both the number of enquiries for our development schemes in London in the past quarter and also our progress on preletting our retail developments.
“Our strong balance sheet and excellent customer relationships give us confidence in our ability to respond and adapt to evolving market conditions.
During the period the REIT offloaded £195.6m of assets at an average of 10.2% above March 2011 valuations.
Lettings were completed at 5.8% above estimated rental value, while voids fell by 0.7% to 3.4%.
The firm’s profit before tax was down by 16.8% to £378.9m.
The group’s loan-to-value ratio, including its share of joint ventures, was down marginally from 39% to 37.7%.
Salway said: “Our continuing progress in the period reflects our focus on operations at every level. We have reduced vacancy rates, secured lettings above estimated rental value and achieved sales above the March 2011 valuation.
“Revenue profit has increased and our balance sheet is stronger, with lower gearing and more capacity to invest in acquisition opportunities as and when they arise.
“We have a pipeline of opportunities within the portfolio to grow shareholder returns, allied with a strong balance sheet to withstand economic fluctuations.
“We are alive to the potential effects of economic uncertainty and changeable sentiment in the capital markets. 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.
“We also believe that market uncertainty may well generate buying opportunities, as the balance between buyers and sellers shifts for some property types.”
Land Securities announced a 4.5% rise in net asset value to 863p a share in a “slightly better than expected” set of half-year results. The portfolio value of the UK’s largest property company rose by 2.1% or £211.5m over the first half to the end of September with developments contributing 6.6%. Chief executive Francis Salway was upbeat about the prospects for the company’s development pipeline, which include its joint venture with Canary Wharf to develop the Walkie Talkie tower in the City, saying that he was encouraged by enquiries. He said: “We are operating in a challenging environment and we expect pressures in managing occupancy rates to continue. “However, we have been encouraged by our first-half performance and by both the number of enquiries for our development schemes in London in the past quarter and also our progress on preletting our retail developments. “Our strong balance sheet and excellent customer relationships give us confidence in our ability to respond and adapt to evolving market conditions. During the period the REIT offloaded £195.6m of assets at an average of 10.2% above March 2011 valuations. Lettings were completed at 5.8% above estimated rental value, while voids fell by 0.7% to 3.4%. The firm’s profit before tax was down by 16.8% to £378.9m. The group’s loan-to-value ratio, including its share of joint ventures, was down marginally from 39% to 37.7%. Salway said: “Our continuing progress in the period reflects our focus on operations at every level. We have reduced vacancy rates, secured lettings above estimated rental value and achieved sales above the March 2011 valuation. “Revenue profit has increased and our balance sheet is stronger, with lower gearing and more capacity to invest in acquisition opportunities as and when they arise. “We have a pipeline of opportunities within the portfolio to grow shareholder returns, allied with a strong balance sheet to withstand economic fluctuations. “We are alive to the potential effects of economic uncertainty and changeable sentiment in the capital markets. 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. “We also believe that market uncertainty may well generate buying opportunities, as the balance between buyers and sellers shifts for some property types.” bridget.oconnell@estatesgazette.com
