Land Securities NAV slumps by two thirds

13th May 2009 07:04

Property giant Land Securities saw its net asset value slashed by two-thirds in 2008 in what it described as 'unprecedented market conditions.'Basic net asset value (NAV) per share slumped to 639p at the end of March 2009 from 1,862p a year earlier, while adjusted diluted NAV per share tumbled to 593p from 1,763p.The group's property portfolio took a £4,744m dive, after sliding £1,293m the previous year.The valuation hit helped push the company deep into the red, with a pre-tax loss of £4,773m versus a pre-tax loss the year before of £988m.The company's rights issue helped reduce net debt substantially, and by the end of March it stood at £3, 924m, down £1,461m or 27.1% on the year.The year saw a small increase in like-for-like voids to 4.6% from 3.5% in 2008.'We expect property market conditions to remain challenging, with vacancy rates rising as businesses fail or contract and, as a result, rental values weaken,' said Francis Salway, Land Securities' chief executive officer.Gross rental income climbed to £727.4m from £713.1m previously. Salway said market conditions are likely to continue to put downward pressure on rental income.On a brighter note, Salways said: 'Investment property pricing may reach a turning point ahead of the rental markets, and the yield gap between property yields and gilts or cash on deposit can be expected to stimulate some buying interest. Indeed, this is just beginning to become apparent for well-let prime properties.'A final dividend of 7p has been recommended which, in conjunction with the three quarterly dividends of 14.7p gives a full year dividend of 51.1p, down from 57p in the year to March 2008. The dividend figures have been restated to account for the rights issue.