LAND Securities topped forecasts yesterday as its central London properties and new shopping centres drove a 4.1 per cent rise in net asset value over the year.
The company behind the Walkie Talkie skyscraper said the office market remains sluggish as nervous companies shy away from big commitments, but a looming squeeze on high-quality space will continue to attract tenants to its sites.
“Our blood is up as far as London is concerned. The push into development that we started a couple of years ago is really starting to pay off,” chief executive Robert Noel told City A.M.
The Walkie Talkie, due to complete next April, is 56 per cent pre-let or in solicitors’ hands.
The firm has as much as 2m square feet of new space in the pipeline, including a mixed-use building on New Ludgate, which Noel said “we will be pushing the button on soon” for delivery in 2015.
Yesterday the company confirmed the start of a £768m project at Victoria Circle, which is being redeveloped with the Canada Pension Plan Investment Board.
Land Securities’ retail portfolio reflected the split between prime sites and the rest of the country. The Trinity Leeds mall opened in March with 95 per cent of the space already let, but overall footfall in the firm’s shopping centres was down 2.6 per cent on last year.
“Bricks and mortar isn’t dead. But there are large swathes of the country where retail will never be the same again,” said Noel. “The REITs [real estate investment trusts] own the best locations. If tenants do go bust, we can attract more.
“We have a deep relationship with our retailers, we know where they do well and we have been changing our portfolio over the last five years.”
Profits from rental income fell 8.7 per cent to £290.7m in the year to the end of March, as the firm sold off and demolished some properties to make way for new projects.
Group pre-tax profits rose 3.4 per cent to £533m.
Analysts at Liberum said the statement “compares very favourably to British Land”, which reported flat net asset value this week.