Land Secs says demand from blue chips will hold up in 2011

City A.M. Reporter
BRITAIN’S largest real estate investment trust Land Securities yesterday said it expected demand from blue-chip tenants to hold up in 2011.

Chief executive Francis Salway said the firm’s plans were “bearing fruit” as he updated the market on trading.

“We expect a wider range of buying opportunities in 2011, although current flows of capital into the sector mean that bidding may remain competitive,”he added.

“The first quarter of 2011 is likely to see mixed news flow around the consumer and the economy, but we expect occupational demand from large corporates to remain steady.”

Salway pointed to City shopping mall One New Change as an indicator of the firm’s success. He said that development was commanding rents in excess of £50 per square foot, a £10 increase on what the firm could have expected in 2009.

One New Change has let 51 per cent of its units, with a further 20 per cent in the hands of solicitors, suggesting a tenancy agreement is near. That means the building is practically 80 per cent let.

Meanwhile, Land Securities said it planned to start work on a retail development in Scotland due to growing demand.

“It is our expectation that we will soon be in a position to start a further retail development at the Atlas Site in Glasgow,” Salway said.

In November, Land Securities posted a 6.7 per cent rise in first-half net asset value.