Commercial Property News

In it's Q1 management statement today Land Securities said that it had made acquisitions in the quarter totalling £174.6million at an average yield of 5.6% (including non income producing development sites).  The two principal investment property acquisitions were the O2 Centre, Finchley Road, in London and the Westgate Centre in Oxford. It also revealed that the weighted average cost of it's debt had fallen to 5.0% (5.3% at 31 March 2010).

The group reported good progress on lettings and success in selling properties. Group LTV at 30 June, based on 31 March 2010 asset values, was 46.1% (43.5% at 31 March 2010) which will fall to 43.7% upon receipt of the £225million initial payment from the Park House W1 sale to Barwa Real Estate.

Voids in the like-for-like portfolio down to 5.7% (5.9% at 31 March 2010).  The void level includes units let on a temporary basis at 1.1%. Letting units in administration are down in the like-for-like portfolio at 0.8% (1.0% at 31 March 2010).

The firm committed to restart its 750,000 square foot shopping centre project at Trinity Leeds, Land Securities said it has achieved the pre-letting threshold for the Trinity Leeds centre, which is now 43% let and that the construction contract is due to be signed imminently, with completion due in Spring 2013. Total property sales in the quarter were £302.9 million.

Chief Executive Francis Salway said:

"The themes in the first quarter continue to mirror the priorities we outlined with our full year results: delivering a substantial development pipeline for completion in 2012/13 and maintaining a strong focus on actions to grow revenue profit in the medium term.  We have gained momentum on lettings, sales and development in the quarter and today we have announced the commencement of the 750,000 sq ft Trinity Leeds retail scheme.

 "Our outlook and plan remain the same - a recovery in property values over the medium term, but interspersed by ripples.  We see strong investor demand in some sub-markets, but early evidence of price resistance in others.  We will continue to play any such imbalances to our advantage.  We have a wonderful pipeline of organic opportunities and since January we have initiated projects with an aggregate development cost of £1billion, with profits already taken from one of those schemes."