Walkie Talkie owner more than doubles profit but warns of supply squeeze
Walkie Talkie tower owner Land Securities says it’s “reaping the reward” of its “bold strategy to develop early and speculatively in London”.
The developer’s seen profit before tax rocket 108 per cent to £1.1bn over the last year. Basic net asset value per share jumped 11.5 per cent to 1.069p, as it’s enjoyed the increasingly favourable market conditions in the capital.
It’s dubbed the year “a year of action”, with sales of £920m, £26.6m of development lettings and £23.6m of investment lettings.
The so-called Walkie Talkie (and sometime Walkie Scorchie) tower at 20 Fenchurch Street is, says Land Securities’, one of its “most financially successful developments yet”. It’s so far delivered a valuation surplus of £137.2m and is 87 per cent let, with an average lease length of 17 years.
Following the Walkie Scorchie fiasco last summer, the group says it now has planning permission for an “external solution”, which it’s starting to fit this month.
Land Securities also offered a word of caution this morning, though, saying it’s expecting to see a shortage of Grade A (i.e. recently refurbished/redeveloped office space) until "at least late 2016". From the statement:
The market balance beyond that will depend on the general development response to improving market conditions.
Land Securities has a clear strategy when it comes to continuing to power growth. Chief executive Robert Noel stressing the welcome news of an improving retail sector and rise in wages, commented:
Our strategy is to ensure we have the right properties in the right locations and to anticipate and accommodate retail trends. Unless we see buying opportunities that satisfy these requirements, our focus will remain on developing retail assets which fit this strategy and selling assets that do not.