Land Securities says markets better than expected

11th Nov 2010 07:27

Real estate giant Land Securities built underlying profit up by 6% during the first half - excluding valuation gains of £314m - and businesses are now more willing to commit to new space than even the company expected.Revenue profit grew to £135.9m in the six months ended 30 September, up from £128.4m the year before, though that jumps to £455.3m including the revaluation compared with a £4.6m loss last time.The valuation surplus of £314.1m represents a 3.4% increase in the value of investment properties since March, aiding a 7% increase in adjusted diluted net assets per share to 737p."Our results reflect the benefit of moves we have made to position the business for the recovery in the market," chief executive Francis Salway said. "We have committed significant capital to developments and it is already driving returns with a valuation uplift on our development programme of just under 10% in the six months." The company has the money, the schemes and expertise to begin additional projects in London in 2011, he added, while edge-of-town locations targeted by supermarkets and other retailers also offer opportunities. Market conditions are "slightly more favourable" than Land expected at this point, but it is "alive to the potential impact of tax increases and public sector job cuts, and we maintain our medium term view of a recovery in property values, albeit interspersed with ripples".The second quarter dividend is the same as Q1 at 7p per share.