Land Securities hails 'sound progress'

19th Jul 2011 07:05

Real estate investment trust Land Securities said the outlook for development in London remains attractive while even the battered retail sector has its bright spots."Retail demand has meant we have over the last few months also begun to step up our activity in retail development predominantly in edge of town locations and we now have a £275m, 1m square feet, pipeline of opportunities to meet the growing demand from food and fashion retailers for space," said Francis Salway, chief executive of Land Securities.On the retail side, disposals since March totalled £83.1m, at 0.2% above March 2011 valuations at an average yield of 5.0%. The principal disposals were food stores in Grimsby, Swindon and Wandsworth. investment property lettings totalled £4.1m across 55 lettings with a further £4.9m in solicitors' hands. The lettings included White Company and Hugo Boss at Gunwharf Quays and Superdry at Overgate, Dundee.The quarterly change in retail sales in the group's shopping centre portfolio (April to June 2011 compared to April to June 2010) was -0.4%, excluding Value Added Tax (VAT), on a like-for-like 'same retailer' basis. This compares to the British Retail Consortium national sales figures for the same period, which include VAT and hence the 2.5% VAT increase, at -0.6%. The quarterly change in footfall on Land Securities' shopping centres (also April to June 2011 compared to April to June 2010) was 0.0% (flat). This compared to a -0.2% movement in national footfall data over the same period.The void level on the Retail Portfolio like-for-like properties was 4.1% at 30 June 2011, down from 4.5% at 31 March 2011. Temporary lettings accounted for 1.4% within this void figure. A further 0.5% is in solicitors' hands. Units in administration increased to 0.9% from 0.6% at 31 March 2011 due to the Focus DIY and Habitat administrations. As for the London portfolio, sales during the quarter totalled £94.0m and were 15.9% above the March 2011 valuation in aggregate at an average yield of 3.3%. Investment property lettings in the quarter totalled £5.4m across 10 lettings with a further £0.5m in solicitors' hands. The void level on a like-for-like basis in the London Portfolio was 3.8%, at 30 June 2011, down slightly from 3.9% at 31 March 2011. Excluding pre-development properties, the voids on the remaining like-for-like properties were 3.0%. Units in administration were 0.2% (0.2% at 31 March 2011).As at 30 June 2011, adjusted net debt eased to £3,997.7m (from £4,185.9m at the end of March. Group loan-to-value including joint ventures at 30 June 2011, based on 31 March 2011 asset values, was 37.5%, down from 39.0% at 31 March 2011.The weighted average cost of debt increased slightly to 5.0% (4.9% at 31 March 2011), and the average duration of the group's debt is 11.6 years (11.4 years at 31 March 2011). These movements are the result of lower drawings of the group's shorter duration low interest rate debt. --jh