LandSecs starts to look forward

15th Jul 2009 07:11

Land Securities is preparing to start work on two major developments in London's West End amid tentative signs that the market may be stabilising.Landsecs added it is beginning to assess acquisition opportunities and is in the process of firming up plans for a start during 2010 on two major London West End developments at Park House, W1, and Selborne House, SW1. The property giant, which raised £756m in a March rights issue to rebuild its balance sheet after huge write-downs, says growing investor interest is now evident for both prime and mid-quality properties, but vacancies are still rising and recent sales have been below book value.In the three months to June, it sold £357.4m of property at 2.7% below March 2009 valuation, at an average yield of 7.7%. Since then it has sold £162m of property at 2.5% below March 2009 valuation at an average yield of 7.4%. In occupier markets, vacancy rates are rising but businesses are becoming more willing to commit to leasing new accommodation, Landsecs said, adding it still believes that occupier markets will recover late in the cycle in terms of delivering rental value growth and expects the overall period of recovery in the sector to be extended.Units in administration within the like-for-like portfolio fell from 3.7% at 31 March to 3.3% at 30 June 2009. Voids in the like-for-like portfolio were 5.1% at 30 June (4.6% at 31 March).