Land Securities (LAND) delivered a very strong first-half performance, with adjusted book value up nearly 12 per cent to 1,129p. Leading the charge were London offices, valued 9 per cent higher, followed by developments and London shops, both up about 7 per cent.
Crucially, as more developments were completed, so gains that have long been in the pipeline were crystallised. The group still has a development programme covering 3m square feet, but as chief executive Robert Noel pointed out, this programme should be completed by the end of 2016. Thereafter the plan is to have a portfolio of strong assets delivering high rental income, while development exposure and debt are both reduced.
The biggest acquisition in the first half was a 30 per cent stake in Kent mega-mall Bluewater and 110 acres of surrounding land. There is considerable potential to increase rental income here, with void rates of over 5 per cent at the time of the acquisition already down to around 4 per cent. The £700m acquisition and £200m of development costs pushed up the group's loan-to-value (LTV) ratio from 32.5 per cent in March to 33.6 per cent, but that should fall back following recent disposals.
Pending upgrades, analysts at JPMorgan Cazenove are forecasting adjusted book value per share of 1,121p by the March 2015 year-end (from 1,013p in 2014).
| LAND SECURITIES (LAND) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,145p | MARKET VALUE: | £9.05bn | |
| TOUCH: | 1,145-1,146p | 12-MONTH HIGH: | 1,149p | LOW: 924p |
| DIVIDEND YIELD: | 2.7% | TRADING PROP: | £217m | |
| DISCOUNT TO NAV: | 3% | |||
| INVESTMENT PROP: | £12.7bn | NET DEBT: | 44% | |
| Half-year to 30 Sep | Net asset value (p) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p*) |
|---|---|---|---|---|
| 2013 | 994 | 0.40 | 51 | 15.2 |
| 2014 | 1,183 | 1.03 | 131 | 15.8 |
| % change | +19 | +159 | +157 | +4 |
Ex-div: 4 Dec Payment: 8 Jan *Dividends paid quarterly (first-quarter dividend of 7.9p paid on 10 Oct) | ||||
