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Retail Slump Holds Back Land Securities

LONDON-Land Securities, Britain's biggest property company, unveiled a flat set of results for the year to 31 March 2001 with pre-tax profits down and NAV only slightly up.

By Graham Parker | Updated on May 23, 2001

LONDON-Land Securities, Britain’s biggest property company, unveiled a flat set of results for the year to 31 March 2001 with pre-tax profits down and NAV only slightly up. Net Asset Value rose 5% to 1154p per share, but pre-tax profits were down 4% to £314.6 million ($450 million), reflecting reduced profits from property sales.

Chief executive Ian Henderson said that while rental growth had been satisfactory or better, valuation yields have risen reflecting increasing wariness from investors about future growth prospects. And this has hit capital values, especially in shops and shopping centres where institutional investors have moved from being net buyers to net sellers.

The strong performance of central London offices–amounting to one third of Land Securities’ portfolio, cancelled out the valuation losses on the retail holdings, which make up over 43% of the holdings. Overall, the portfolio was valued by Knight Frank at £7.9 billion ($11.3 billion), showing an uplift of 3.9%.

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