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Negative Points: London Portfolio like-for-like voids (empty units) rose from 0.9% at 30 September 2013 to 1.1% as of 31 December 2013. Units or occupiers in administration at the company increased from 0.6% at 30 September 2013 to 0.7% at 31 December 2013 (Retail Portfolio 1.3%, London Portfolio 0.0%). During the first half of the year, the group's total property return was 4.7%, slightly underperforming the Investment Property Databank (IPD) quarterly index at 4.9%. Online shopping continues to cast a shadow over physical retailing. Online retailers currently enjoy tax advantages. A key concern for the company's City of London office exposure would be a major setback in financial markets. Land Securities is exposed to development risk where occupiers are reluctant to enter into commitments to take new space in its developments. The commercial property sector is subjected to market cyclicality where volatility and speed of change of asset valuations and market conditions can impact on performance............
Financial Highlights: Voids in the like-for-like portfolio down from 2.0% at 30 September 2013 to 1.8% at 31 December 2013 The third interim dividend of 7.6 pence per share, up from 7.4 pence last year
Third quarter trading update: Management highlighted "continued high levels of activity across our business." It also announced two new central London development starts. The share price drifted marginally lower in opening stockmarket trading. The property company reported improved occupancy, with voids (empty units) in the like-for-like portfolio down from 2.0% at 30 September 2013 to 1.8% at 31 December 2013 - Retail property voids provided the momentum, falling from 3.0% to 2.5%, while like-for-like voids at its London Portfolio business hindered, rising from 0.9% to 1.1%. Management noted that "In retail, there is continued demand for good locations as evidenced by the increased occupancy levels in our properties and, in particular, there is strong demand in food and beverage. In central London, we have seen occupier demand increase further. This, combined with a constrained supply of high quality, technically resilient space, means our significant committed programme of speculative developments is well placed." A planning application for a solution to the solar glare issue of its high profile City of London Walkie-Talkie building is due to be submitted next month, whilst the third interim dividend was increased to 7.6 pence per share, up from 7.4 pence last year
EXCELENT UPDATE THIS MORNING......... 22 January 2014 Land Securities Group PLC ("Land Securities" / "the Group" / "the Company") THIRD QUARTER INTERIM MANAGEMENT STATEMENT Land Securities reports continued high levels of activity across its business, and announces two new central London development starts. Key Highlights: Good progress on developments · £7.3m of development lettings signed since 1 October 2013 with a further £7.9m in solicitors' hands · 123 Victoria Street, SW1, 93% let · 62 Buckingham Gate, SW1, 57% let with a further 10% in solicitors' hands · 20 Fenchurch Street, EC3, 64% pre-let with a further 23% in solicitors' hands · Successful launch of Trinity Kitchen and Primark at Trinity Leeds · Completion of pre-let retail development at Crawley · Construction commenced at Taplow, 79% pre-let with a further 12% in solicitors' hands · £243m of new developments commenced at 1 New Street Square, EC4 and 20 Eastbourne Terrace, W2 · Positive planning decisions at Ealing Filmworks and White Rose, Leeds
Land Securities Group: Barclays upgrades to overweight.
Land Securities: Jefferies reduces target price from 831p to 788p, while the hold rating is reiterated.
"There remains a high level of activity across our investment portfolio and we have continued to manage space effectively with voids largely unchanged. Both our portfolios are well positioned for what remain challenging wider economic conditions." He said he was confident the group would continue to deliver growth for shareholders as they planned to invest in further developments and had high interest in schemes. Shares fell 0.06% to 805.00p at 14:00 following forecasts from Investec which retained its 'hold' rating on the company at an 825p net asset value-derived target price. "Void and tenants in administration metrics are not troubling, but we still expect earnings to fall by about 10% in the year to March, as properties are taken out of the rental portfolio for redevelopment," the analyst said. "The dividend is comfortably covered, but the earnings trajectory, albeit s
Despite the collapse of retailers Jessops, HMV and Blockbuster, the retail portfolio of units in administration were down 1.5%, with 22% still trading. Overall occupancy rate for retail stood at 97.1%. The total investment in the quarter came to £248.1m, including capital expenditure on developments of £76.8m. Land Securities Chief Executive, Robert Noel, said he was pleased with the performance during the period. "This was a good quarter with continued momentum in development lettings and a strong operational performance across our investment portfolio," he said. "Encouragingly, interest levels in both our London and retail portfolios remain high.
Commercial property company Land Securities said Wednesday it continued to make good progress in the third quarter as it acquired development lettings and achieved strong operational performance across its investment portfolio. The FTSE 100 group signed £10.8m in development lettings since October 1st, driven by a London portfolio to the tune of £5.8m and a further £8.6m in the pipeline. London leases included offices and retail space in the city, West End, Victoria and Buckingham Gate. The offices of shopping centre One New Change in London's Cheapside were fully let and retail space 99% leased. The company attained £9.2m worth of investment lettings with an additional £7.8m in solicitors' hands. Voids in the like-for-like portfolio were up 2.9% at December 31st due to the vacating of 1 New Street Square, EC4, a pre-development property off Fetter Lane, London, described as a 'green' cluster of buildings which include grass roofs and a wall of plants. Units let on a temporary basis and others pending red-tape formalities accounted for the void.
Positive Points: The group said £10.8 million of development lettings had been signed since the beginning of October, with office space now fully let at London's One New Change. Accompanying management comments noted, "This was a good quarter with continued momentum in development lettings and a strong operational performance across our investment portfolio. Encouragingly, interest levels in both our London and Retail portfolios remain high". Voids (empty properties) in the like-for-like portfolio remained contained, up 2.9% as at 31 December (2.6% at 30 September 2012) due to the vacating of 1 New Street Square, EC4, a pre-development property. Group loan-to-value, ( LTV) including joint ventures at 31 December 2012, based on 30 September 2012 asset values, was 36.4% (36.2% at 30 September 2012).
Negative Points: A key concern for the company's City of London office exposure would be a major setback in financial markets. A major downside risk for the company's UK retail portfolio would be if the current slowdown in UK consumer demand were to become more entrenched. Management had previously noted that "transactions are taking longer". In November, the group said that its defined benefit pension scheme, which is closed to new members was in a net deficit position of £4.3 million as at 30 September 2012. That compared to a deficit of £2.4 million at 31 March 2012. The change is primarily due to lower than expected returns on scheme assets.
Third quarter interim statement: The positive signals being sent out of late by the property and housebuilding sectors have been echoed in a robust statement from Land Securities. For investors wanting exposure to the burgeoning property market in London, Land Securities is a natural fit. In addition, the company has a presence in several select locations throughout the rest of the country, whilst there is the additional attraction of a 3.6% dividend yield for income seekers. However, challenges remain. The number of empty properties edged up marginally during the period, although the figure of under 3% is containable. The wider difficulties of corporate and retail uncertainty are also in the mix, making Land's prospects rather more difficult to achieve. Even so, the company has been making very steady progress, as recognised by a 17% hike in the share price over the last year, as compared to a 7% gain for the wider FTSE100
Executive Director Richard Akers said leisure continued to be a growing element of the company's portfolio both organically and through acquisition. "This transaction will further increase our reach and expertise in the sector," he said. "Today's announcement is an affirmation of our belief in the attraction of leisure and of our desire to be responsible for the management of assets where we hold a majority share." The transaction is subject to approval from unit-holders who are not participating in this transaction to the transfer of the management company to Land Securities. It also needs Capital & Regional shareholder approval for the sale of their interests in both the fund and the management company.
Land Securities said it would spend well over 100m pounds to take control of entertainment firm X-Leisure. The target firm owns 16 schemes across the UK, including the X-scape centre in Milton Keynes and Brighton Marina. The portfolio includes a range of leisure and entertainment sites, including cinemas, two ski slopes, bars, restaurants, clubs, health and fitness and retail. Land Securities has signed share purchase agreements with Capital & Regional and AREA Property Partnership to take a further 42% interest in the X-Leisure Unit Trust. It will also take 100% interests in X-Leisure Limited, the management company of the fund, and X-Leisure (General Partner) Limited for around £110.6m. Land Securities currently owns a 12% interest in the X-Leisure Unit Trust. The deal would give the company day to day control of the assets in the X-Leisure Unit Trust.
Land Securities Group: Morgan Stanley raises target price from 810p to 830p and upgrades to overweight.
Currently undervalued and room for pushing this out to 805 in the short term. Strong management and good medium to long term vision leads me to believe that this will come good again despite disappointing half year results.
Land Securities: Jefferies keeps hold rating and 849p target; Panmure Gordon keeps hold rating and 820p target.
Positive Points: The board noted that "development lettings exceeded our expectations in terms of rent, timing and incentives." It also noted that "the returns we're getting from our development program are far higher than we would find in the investment market." £14.6 million of development lettings were reported since 1 April 2012. Its 20 Fenchurch Street (Walkie Talkie) building is now 23% pre-let with a further 11% in solicitors' hands. Like-for-like voids (empty properties) fell to 2.6% from 2.9% in March (2012). Retail voids declined to 3.1% from 3.4%, with its London portfolio coming in at 2.0% (2.4%). Units in administration declined for its Retail business to 1.8% from 2.8%. Group debt declined. Group loan-to-value (LTV - including joint ventures) declined from 38.0% at March 2012 to 36.2% at September 2012. This reflected proceeds received this year relating to sales recognised prior to 31 March 2012. Accompanying management comments noted that "We continue to deliver on a clear plan, and this is driving high levels of activity across the business. Having reduced our vacancy rates, and with encouraging interest in our developments, we have added more schemes to our development programme." A progressive dividend policy continues to be pursued. A first half dividend of 14.8 pence was declared, an increase of 2.8% on the previous half year payment.
Negative Points: On the company's own adjusted underlying basis, revenue profit declined by 9.8% to £143.7 million compared to the prior year. Reported profit before tax declined to £131.4 million compared to £378.9 million. Management previously noted that "transactions are taking longer". The Group operates a defined benefit pension scheme which is closed to new members. At 30 September 2012, the scheme was in a net deficit position of £4.3 million compared to a deficit of £2.4 million at 31 March 2012. The change is primarily due to lower than expected returns on scheme assets. With UK inflation still running ahead of wage growth, the outlook for consumers remains challenging, a fact which has placed pressure on its Retail portfolio.
Financial Highlights: Net assets per share increased by 1p from 921p at 31 March 2012 to 922p at 30 September 2012. Adjusted diluted net assets per share also increased by 1p from 863p at 31 March 2012 to 864p. Adjusted diluted earnings per share were 18.4p (2011: 20.5p), down 10.2% on the comparable period.
Half year results: Land Securities fails to inspire. The announcement failed to inspire investors, with the share price marginally lower (down just over 1%) in early trading. Both headline and adjusted Net Asset Value increased by just a penny, whilst adjusted earnings per share declined by 10.2%. Sales of properties in order to reinvest in new projects appeared to provide the drag on earnings. Nonetheless, like-for-like voids (empty properties) fell to 2.6% from 2.9% in March (2012). Retail voids declined to 3.1% from 3.4%, with its London portfolio coming in at 2.0% (2.4%). Furthermore, management noted that "nothing we have seen in the last six months leads us to change our outlook". In all, concerns for the UK's economic outlook continue to weigh against the company's income paying ability in a low interest rate environment.
Company overview Land Securities is a major Real Estate Investment Trust (REIT). It owns, manages and develops properties across the United Kingdom. The group operates through two divisions: 1) The London Portfolio – which includes office developments and retail properties in London 2) The Retail Portfolio – which includes shopping centres and shops, retail warehouses and food stores. Around 500 organisations are provided with accommodation via its London Portfolio, whilst the Retail Portfolio includes over 40 shopping centres and retail parks.
Land Securities, the FTSE 100 real estate investment trust, has acquired The Printworks, a leisure scheme prominently located in central Manchester. The company purchased the business, which attracted more than nine million visitors last year, for £93.9m. The scheme comprises over 350,000 sq ft of leisure accommodation and is currently 93% let with a weighted average unexpired term of 12.9 years. Land Securities' Executive Director Richard Akers said: "Leisure is not subject to the same structural changes currently occurring in retail and its importance in how and where people choose to shop is growing. The Printworks is the dominant leisure scheme in one of the top cities in the UK and its acquisition builds upon the significant relationships we have across our portfolio with leisure operators." The group added that the leisure facilities have "excellent" transport links and is home to a variety of occupiers including the only IMAX cinema in Manchester, a Virgin Active health club, national restaurants and some nightclub and bar operators. Evidently investors were less than impressed, with shares down 0.24% to 815p by late morning.
Land Securities: Deutsche Bank raises target from 960p to 1,030p, buy rating kept.