Land Securities proves robust in third quarter

Third quarter results from Land Securities displayed the continuing demand for its property developments and ongoing health of the London letting market.

The FTSE 100 company, which will pay a third interim dividend of 8.15p per share on 8 April, made £450.5m of disposals during the quarter, more than it made in the entire first half of the year to bring the total to £852.6m for the year to date.

These disposals were sold at 1.8% more than their 30 September 2015 valuation.

Total disposals were also boosted by £124.3m trading property deals, with a profit on disposals of £21.4m.

After these deals and development and refurbishment expenditure of £67.9m, Land Securities had £1.6bn of cash and undrawn facilities at the 31 December period end.

This meant net debt stood at £3.5bn, with a weighted average cost of debt of 5.0%.

The group completed £13.7m of development lettings in the quarter, with £4.2m in solicitors’ hands, and £9.9m of investment lettings, with £11.9m in solicitors’ hands.

Footfall in its shopping centres, which include Bluewater, Buchanan Galleries in Glasgow and Trinity Leeds, was at record levels, though retailer sales were down on a same store like-for-like basis.

Chief executive Robert Noel said it was a good third quarter with robust operational performance.

"In London, rental value growth continued and the 186,000 sq ft of development lettings we completed in the quarter were ahead of our valuers' most recent estimates. In Oxford, we are transforming the city's major shopping centre and have made good leasing progress two years ahead of opening.

"We are delivering on our clear strategy for the business and, despite economic and political uncertainty, are confident in the strength of demand for our schemes."

Broker Numis said it was "business as usual" for LAND and that given the recent share price sell off, analysts said they believe the statement "should give the market some comfort that the underlying fundamentals of the business remain robust".

Shares in the company rose initially before falling 0.6% to 1,054p by 0900 GMT.