Land Securities upbeat on investment prospects

Land Securities trimmed its net debt by 5.3% in the first quarter ended June 30 to £4.48 bn (EUR 5.21 bn) from £4.73 bn in the previous period, the company announced this week in a press release.

The decline reflects further sales of investment property in the quarter, totalling £357.4 mln. The divestments were made at 2.7% below March 2009 valuation, at an average yield of 7.7%, the company said in a press release.

While market indices show that property values are still declining, growing investor interest is now evident for both prime and mid-quality properties, the company said. Earlier it said it expected that the peak to trough fall in values is likely to be 45-50%.

Commenting on the quarter, Chief Executive Francis Salway said: 'Our actions and the market trends have been consistent with our statements since the turn of the year. This has contributed to achievements during the quarter in line with our plans and leaves us well positioned for the next stage of the cycle.
With a strengthened balance sheet we are now assessing opportunities for new investment.

'We maintain our view that patience is a virtue and that opportunities will arise over years not just months, particularly in terms of disposals by banks. We are confident that our financial flexibility and scale will give us competitive advantage to capitalise on these opportunities as the cycle turns.'

According to a report in the Financial Times, the company is targeting income-producing investments in retail property, and also additions to its London office portfolio.

Land Securities has sold more than £4bn of assets in the past two years in a bid to shore up its balance sheet. It also held a £750 mln rights issue earlier this year to bolster its financial position. The company recorded another £162 mln of sales since 30 June at 2.5% below March 2009 valuation, at an average yield of 7.4%.