"Our outlook hasn't changed; what has changed is growing confidence that our outlook is correct," said chief executive Francis Salway. The company has not started a new development since 2006, and made its last property acquisition in 2007. Having announced at May's full-year results, Mr Salway believes his estimate of a 45-50 per cent peak-to-trough valuation decline is "likely to be accurate".
This week, the industry benchmark IPD index showed commercial property values have fallen 44 per cent since the market's peak, and there is a growing expectation that the large real-estate investment trusts (Reits) will be on the front foot, as opportunities in the next cycle begin to emerge.
Earlier this week, British Land announced that it had appointed a head of strategy to its executive team, signalling that management focus has switched from damage limitation to opportunity hunting. Not to be outdone, Land Securities has signed up property big-hitter Chris Bartram as a non-executive. But could the big Reits end up playing the recovery better than their smaller, Aim-traded counterparts?
Certainly, it is the newly-formed opportunity funds that have been grabbing all the headlines. pulled off an oversubscribed £226m placing last week, and Max Property is on the verge of concluding its first major acquisition. But there have also been some early casualties in the form of NewRiver Retail and Landbank - both failed to raise enough capital to list.
"I have no doubt that the aspirations of these new property vehicles would be to have a portfolio of our quality, with 50 per cent loan-to-value gearing - which is exactly what we already have," said Mr Salway. "We have looked at some acquisitions this quarter, but we are prepared to be patient, and patience can be a virtue," he added. "The banks will not rush to sell anything in the short term, and opportunities will come over years rather than in the next few months. The scale of our business will give us a competitive advantage."
Land Securities will continue with asset disposals, including its stake in Birmingham's Bullring shopping centre, and reported growing investment interest for prime and mid-quality assets.
