Land Securities May Start Building Speculatively Again on Brexit

Trump’s Impact on the U.K. Commercial Property Market

Land Securities Group Plc is more likely to start building London properties speculatively after the Brexit vote spooked the market and deterred other developers, Chief Executive Officer Robert Noel said in an interview.

Land Securities has cut its debt and leased almost all of the space in the developments it started after the global financial crisis, Noel said on Tuesday. That would enable the U.K.’s largest real estate investment trust to take advantage of the market uncertainty, he said.

“We will start again sooner than we would have done had we voted to remain in the EU, which is quite exciting,” Noel said. “The metric we watch like a hawk is whether other people are building and the early signs are that some space has slipped, but not as much as you would imagine.”

Land Securities launched a 3.1 million-square-foot (288,000-square-meter) speculative development pipeline in 2010, anticipating an economic recovery that began as the buildings started to be completed. About 10 percent of that space remains available after the company leased an additional 138,000 square feet in the six months through September, Noel said.

First-half profit excluding changes in asset values and one-time items rose 4.5 percent to 192.5 million pounds ($239 million) because of lower interest costs and income from new leases, Land Securities said on Tuesday. The company reported a net loss of 95.8 million pounds, or 12.1 pence a share, compared with a profit of 708.1 million pounds, or 89.3 pence, a year earlier, as it wrote down the value of its properties.

“We have pretty much finished our developments of scale,” Noel said. “We have got our interest costs down and it puts us in a very resilient position.”

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