Land Sec. Group PLC LAND First Quarter Interim Management Statement

  Land Sec. Group PLC (LAND) - First Quarter Interim Management Statement

RNS Number : 8927H
Land Securities Group PLC
18 July 2012




18 July 2012



Land Securities Group PLC ("Land Securities" / "the Group" / "the Company")

FIRST QUARTER INTERIM MANAGEMENT STATEMENT

Land Securities continues to deliver lettings across its development pipeline,
execute plans for all its assets and maintain its strong financial footing
ready to take advantage of any future opportunities.



Key Highlights:



Good momentum on lettings across all schemes

· £9.3m of development lettings signed since 1 April 2012

London Portfolio - £5.8m of development lettings with a further £2.4m in
solicitors' hands

· One New Change, EC4 - 94% let

· 20 Fenchurch Street, EC3 - offices 19% pre-let or in solicitors' hands

· 123 Victoria Street, SW1 - retail fully let, offices 42% pre-let

Retail Portfolio - £3.5m of development lettings with a further £2.3m in
solicitors' hands

· Trinity Leeds now 72% pre-let with a further 8% in solicitors' hands

· 185-221 Buchanan Street, Glasgow remains 92% pre-let



Asset management strengthening the portfolio

· £7.0m of investment lettings in total with a further £4.3m of lettings
in solicitors' hands

· Voids in the like-for-like portfolio up at 3.2% (3.0% at 31 March
2012). The void level includes units let on a temporary basis at 0.8% with a
further 0.7% under offer

· Retail Portfolio voids flat at 3.6% (3.6% at 31 March 2012). Units let
on a temporary basis at 1.4% with a further 0.7% under offer

· London Portfolio voids at 2.9% (2.5% at 31 March 2012)

· Units in administration in the like-for-like portfolio at 1.1% at 30
June 2012 (1.2% at 31 March 2012)

· Retail units in administration are at 2.0% (2.2% at 31 March 2012) with
53% of this still trading

· London units in administration flat at 0.2%



Financial strength

· There were no disposals in the period

· Total investment in the quarter of £148.2m, including capital
expenditure on developments of £59.5m

· Acquisitions since 1 April totalled £67.6m at an average yield of 4.1%

· Group LTV including joint ventures at 30 June 2012, based on 31 March
2012 asset values, was 38.1% (38.0% at 31 March 2012), which will reduce to
34.3% on receipt of £394.6m of proceeds from disposals already recognised



Commenting on the performance over the quarter, Land Securities' Chief
Executive Robert Noel said:



"Our focus continues to be to secure income from our developments. We are
pleased with progress and continue to see interest from occupiers, despite
ongoing uncertain economic news flow. While transactions are taking longer,
occupier interest and intent remains firm as businesses seek out efficient
space for their future needs.



"We remain confident that the development pipeline offers exceptional
opportunity to deliver growth while our active asset management and strong
financial base underpin our activities."



Further activity



London Portfolio



In the City, at One New Change, EC4 a further 34,800 sq ft was let to Panmure
Gordon and bwin, bringing the scheme to 94% let. At 20 Fenchurch Street, EC3,
51,000 sq ft has been let to Markel International and a further 11% is in
solicitors' hands. The scheme is now 19% let or in solicitors' hands with
completion due in April 2014.



In the West End, at 123 Victoria Street, SW1, Jimmy Choo has chosen to
increase its occupancy by 11,000 sq ft to 47,900 sq ft, and has recently taken
possession ahead of practical completion. A further 31,000 sq ft has been let
to CDC Group plc taking the percentage pre-let to 42%. The scheme is due to
complete in August 2012. Our residential development at Wellington House,
SW1, will complete in September 2012, whereupon we will recognise the sale of
the units as trading profits.



In addition to this key leasing activity, we continue to strengthen and
lengthen income. Since 1 April, we have completed £3.8m of investment
lettings across the London Portfolio. In addition, we have restructured a
number of leases including the lease at Cardinal Place with Ruffer, who have
doubled their occupancy to 45,000 sq ft and extended their lease from 2016 to
2021.



We have also secured two predominantly vacant strategic sites for £35.9m. We
purchased St James's Park Centre in Victoria, SW1, an important extension to
our masterplan for Victoria and exchanged contracts for the acquisition of
19-23 Shaftesbury Avenue, W1, completing the island site behind Piccadilly
Lights.



Retail Portfolio



Trinity Leeds has moved from 65% pre-let at March 2012 to 72% pre-let with a
further 8% in solicitors' hands with the final MSU (major space user) unit
taken by Urban Outfitters during the period. This scheme, set to transform
Leeds' city centre, will open in March 2013.



185-221 Buchanan Street, Glasgow, also due to complete next March, remains 92%
pre-let. With the successful pre-letting of the majority of the retail space,
our attention is now turning to the residential part of the scheme which
consists of 49 apartments.



In asset management, we continue to execute plans for every asset, with a
focus on securing income. We secured £3.2m of retail investment lettings at
2.9% below the March 2012 rental values (1.0% below if turnover leases are
excluded). Across the portfolio we have continued to see interest in space:
Cath Kidston and Yo! Sushi will be opening stores at Princesshay, while Jack
Wills took an extra unit at Gunwharf Quays, Portsmouth, and UGG have agreed to
debut in the centre. Office, JD Sports, Vodafone and Vision Express have all
taken units at White Rose, Leeds.



We have maintained good progress in our out-of-town programme with a 48,000 sq
ft letting to Asda at Chadwell Heath where development is due to commence
shortly. At Ravenside Retail Park, Bexhill, we received a Minded to Grant
Resolution for a new Marks & Spencer store. We have also entered into an
agreement with St James's Investments to develop a site in Nuneaton, primarily
for a foodstore, subject to planning.



During the quarter we acquired a £50m leisure asset, The Cornerhouse,
Nottingham, at a net initial yield of 6.6% after expiry of a rent free period.
We acquired Europa House, Portsmouth for £3.25m delivering an empty office
block and 400 car park spaces close to Gunwharf Quays. Planning permission
has already been granted for a 170 bedroom hotel. We have also purchased a
site adjacent to our Kingsmead leisure asset, Bath and are forward funding the
construction of a 108 bedroom hotel to complement our asset.



The quarterly change in retail sales in our shopping centre portfolio (April
to June 2012 compared to April to June 2011) was +1.4%, on a like-for-like
'same retailer' basis. This compares to the BRC national non-food sales
figure for the same period, at -0.2%. The quarterly change in footfall in our
shopping centres (also April to June 2012 compared to April to June 2011) was
-2.8%. This compared to a -3.0% movement in national footfall data over the
same period.



Group



As at 30 June 2012, adjusted net debt (including joint ventures and adjusted
for the nominal value of our bonds but excluding the mark-to-market on our
swaps) amounted to £4,040.2m (31 March 2012: £3,981.4m). Group LTV including
joint ventures at 30 June 2012, based on 31 March 2012 asset values, was 38.1%
(38.0% at 31 March 2012) which will reduce to 34.3% on receipt of all proceeds
from disposals already recognised.



The weighted average cost of debt is 4.9% (5.0% at 31 March 2012), with an
average duration of 10.6 years (10.9 years at 31 March 2012).

Dividend



The first interim dividend payment for the current financial year will be 7.4
pence per share. It will be paid on 12 October 2012 to shareholders on the
register at 14 September 2012. The cash dividend will be paid entirely as a
Property Income Distribution (PID).



The Group offers its shareholders the option to receive a scrip dividend
alternative which will not be treated as a PID. The latest date for election
to participate in the scrip dividend alternative in respect of the first
interim dividend will be 17 September 2012 and the calculation price will be
announced on 25 September 2012 with the calculation period being 18 to 24
September 2012.





                                   - Ends -

                                      

A conference call for analysts is being held today at 08:30 BST

Conference call details:

Dial-in number: +44 (0) 1452 555 566

Call title: Land Securities Q1 IMS

Conference ID: 89645211



A replay facility will be available to listen to immediately following the
call for a period of 7 days

Encore Replay details:

UK dial-in number: 0845 245 5205

International dial in number: +44 (0) 1452 55 00 00

Access number: 89645211#



For further information, please contact:



Robert Noel / Donal McCabe  John Sunnucks / David Allchurch
Land Securities             Tulchan Communications
T +44 (0)20 7413 9000       T +44 (0)20 7353 4200



Forward Looking Statements



This document may contain certain 'forward-looking' statements. By their
nature, forward-looking statements involve risk and uncertainty because they
relate to future events and circumstances. Actual outcomes and results may
differ materially from any outcomes or results expressed or implied by such
forward-looking statements.



Any forward-looking statements made by or on behalf of Land Securities speak
only as of the date they are made and no representation or warranty is given
in relation to them, including as to their completeness or accuracy or the
basis on which they were prepared. Land Securities does not undertake to
update forward-looking statements to reflect any changes in Land Securities'
expectations with regard thereto or any changes in events, conditions or
circumstances on which any such statement is based.



Information contained in this document relating to the Company or its share
price, or the yield on its shares, should not be relied upon as an indicator
of future performance.



                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


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