Land Secs dusts off £700m development plans

The group has obtained construction tenders on three projects - including a whole block fronting onto Oxford Street - which Mr Salway is "very confident" will start next year, for completion in late 2012 or early 2013. Office, retail and residential uses are planned. The estimated capital expenditure to completion is £380m, which can be funded from within Land Securities' existing banking arrangements. The group's Harvest joint venture with Sainsbury is also preparing "a number of planning applications" for new projects and extensions to existing stores.

In addition, Mr Salway said the group has "firepower of between £750m and £1bn" for new acquisitions. It has placed bids on £500m-worth of stock in the last few months, though has yet to bag a deal. "Clearly there will be opportunities [with the banks] but these will come out over years rather than months," added Mr Salway. "I'm happy to re-state our belief - patience is a virtue."

At the performance level, the overall valuation of Land Securities' portfolio fell 1.4 per cent in the half - shaving just 3 per cent off the 639p year-end NAV. And while Land Securities doesn't perform quarterly valuations - unlike British Land - management thinks that values turned positive in July. Indeed, management noted that "the pick-up has post dated our September results" and expects values to increase for the next five years. Meanwhile, voids remained stable at 5 per cent on a like-for-like basis and new lettings in the period secured £30m of income.

Broker KBC Peel Hunt has upgraded its year-end NAV forecast by 8 per cent to 671p.

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