Land Secs portfolio drops 20% in four months

The value of Land Securities' investment property portfolio declined 20% from £12.5 bn (EUR 14.2 bn ) at end-September 2008 to £9.96 bn (EUR 11.3 bn) on 31 January this year. The company released the information on Thursday as it announced plans to raise £755.7 mln (EUR 860 mln) through a heavily discounted rights issue.

The rate of valuation decline presented by Land Securities, the largest real estate investment trust (REIT) in the UK, is calculated after adjustments for property investments, disposals and capital expenditure.

The £2.4 bn decline in four months graphically illustrates the pain the entire UK property sector is going through. British Land, the second largest UK REIT, said in its half-yearly report last November that it had seen the value of its portfolio plummet by 10.8%, or £1.4 bn, to £11.6 bn (EUR 13.8 bn) in the six months to end-September 2008.

Great Portland Estates, the listed specialist in Central London office and retail, said in January this year that the value of its property portfolio had dropped by 12.4% since September 2008. The valuation of the group's properties at end-December 2008 was £1.2 bn (EUR 1.36 bn), a fall of £175.5 mln since the end of September.

The Royal Institute of Chartered Surveyors (RICS) has warned UK commercial real estate capital values could decline by as much as 50% peak-to-trough over the current property cycle.

Click on the link below to read about the cash call announced by Land Securities.