Land Securities has confirmed a slight increase in administration in its retail portfolio in its third-quarter trading statement released today.
The UK’s largest property company revealed shops in administration in the like-for-like portfolio increased slightly to 0.6% at 31 December, from 0.4% at 30 September, although analysts said this was “better than expected”.
As at 20 January, the units in administration stood at 1%.
LandSec said voids in the like-for-like portfolio were down to 3.1%, compared with 3.3% at the end of September last year. The void level includes units let on a temporary basis at 0.9%. A further 0.2% is under offer.
Total property sales in the quarter were £104m (net receipts) at 1.9% below the March 2011 valuation and at an average yield of 7.6%. Total property sales over the nine months to 31 December were £299.7m, at 5.7% above the March 2011 valuation and at an average yield of 5.4%.
During the quarter LandSec invested £89.1m, including capital expenditure of £51.1m, and acquisitions of £11.1m at an average yield of 1.4%.
Lettings in its investment portfolio totaled £7.1m at an average of 0.5% above the September 2011 rental values during the third quarter. A further £3.3m of lettings are in solicitors’ hands.
The REIT confirmed a 25,200 sq ft letting to CBRE Global Investors at its One New Change office and retail scheme, EC4, which is now 82% let.
It’s Trinity Leeds scheme has moved from slightly more than 50% prelet in September last year to to 57.8% prelet, with a further 7.9% in solicitors’ hands.
In Glasgow its 185-221 Buchanan Street has moved from 67.2% prelet at September 2011 to 90.7% prelet by income for the commercial element of the scheme.
During the third quarter, LandSec said milestones on its future development pipeline included winning planning permission for a 336,000 sq ft scheme, including around one-third for residential, at Kingsgate House in Victoria.
It also said it made good progress on edge-of-town and out-of-town retail developments, winning planning for its 146,000 sq ft scheme in Crawley, and submitting applications and waiting for decisions on a further 254,000 sq ft in Peterborough, Taplow and Chadwell Heath. It also agreed terms for the purchase of a further four sites.
Following the signing of a new £1,050m five-year revolving credit facility at a headline margin of 120 basis points over LIBOR, its weighted average cost of debt is 5% (4.9% at 30 September 2011), and its average debt maturity is 11.2 years (11 years at 30 September 2011).
Group LTV including joint ventures at 31 December 2011, based on 30 September 2011 asset values, was 37.2% – broadly similar to 37.7% at 30 September.
Outgoing chief executive Francis Salway said: “Despite weak economic news flow, we have continued to make progress in the period having completed a number of development lettings, and further reduced void levels on our portfolio. As is to be expected in a period of economic uncertainty, letting transactions are taking longer to execute.
“Having refinanced over £1bn of our bank facilities, we are well placed with long average duration of debt, moderate balance sheet gearing and the capacity to invest. We expect the economic uncertainty to continue in the near term, but we remain confident of our ability to withstand economic fluctuations and to take advantage of opportunities that may arise from the scarcity of bank funding.”
bridget.o’connell@estatesgazette.com
