Given the tough conditions facing the retail sector, Land Securities (LAND) did well to minimise the effects on its retail portfolio. In valuation terms, shopping centres and shops fell 2.9 per cent, and retail parks by 4.5 per cent. By contrast, and against all the bearish headlines, London offices were revalued by +0.2 per cent in the six months to September 2018. Overall, the combined portfolio lost 1.4 per cent in value to 1,384p per share on an adjusted basis.
While the retail side remains vulnerable to changes in the way that consumers shop, the London office market is performing well; so much so that the company has a potential 2M sq ft in the development pipeline, representing a total development cost of £2bn. There are also plans to enter the small but fast growing flexible office market, with 36,000 sq ft of space in Victoria Street, London, to be launched early next year. Plans are also under way for mixed use developments on its suburban London retail sites including over 4,000 homes, with planning applications expected to be submitted in the first half of 2019.
Analysts at Peel Hunt are forecasting adjusted net asset value (NAV) of 1,353.7p at the March 2019 year-end (from 1,402.7p in 2018).
| LAND SECURITIES (LAND) | ||||
| ORD PRICE: | 859.8p | MARKET VALUE: | £6.38bn | |
| TOUCH: | 859-859.8p | 12-MONTH HIGH: | 1,017p | LOW: 802p |
| DIVIDEND YIELD: | 5.5% | TRADING PROPERTIES: | £23m | |
| DISCOUNT TO NAV: | 38% | NET DEBT: | 36% | |
| INVESTMENT PROPERTIES: | £13.4bn** | |||
| Half-year to 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)* |
| 2017 | 1,404 | 34.0 | 4.2 | 19.7 |
| 2018 | 1,385 | 42.0 | 5.9 | 22.6 |
| % change | -1 | +24 | +40 | +15 |
| Ex-div: | 29 Nov | |||
| Payment: | 4 Jan | |||
| *Dividends paid quartely. Ex-div and pay dates refer to second quarter dividend of 11.3p per share **Includes joint ventures | ||||
