Land Securities Group plc Rises On Record Leasing Levels

Land Securities (LSE: LAND) is up almost 2.5% so far today, following publication of its preliminary annual results for the year to 31 March 2015 in which it announced a pre-tax profit of £2,416.5m — an increase of 118% over the previous year’s £1,108.9m — and a total business return of 30.7%.

The company, which is the largest commercial property company in the UK, has reported “record leasing levels” across its development programme in London, with its 20 Fenchurch Street — nicknamed ‘The Walkie-Talkie’ — development now 92% let, and 1 New Street Square pre-let in its entirety to Deloitte LLP.

Land Securities says that it has “transformed” its portfolio of shopping centres, focusing on assets that fit in with its current strategy of “dominance, experience and convenience” and disposing of just over £1bn worth of ones that do not. As part of its portfolio transformation, the company has acquired a 30% managing stake in the Bluewater shopping centre in Kent, and has taken full ownership of Buchanan Galleries in Glasgow, as part of £951.4m of acquisitions during the year.

The total value of Land Securities’ combined portfolio now stands at £14bn, with a valuation surplus of 17.3% overall and 38.7% for properties in its development programme. 

The company says that it will deliver 1.5m square feet of development over the next 18 months, and that it currently has 1.8m square feet of retail development opportunities, including Westgate in  Oxford, an extension to Buchanan Galleries in Glasgow, and Ealing Filmworks.

Commenting on the results, CEO  Robert Noel said:

Our strategy is delivering for our customers, our communities and our shareholders. Crucially, it is a strategy which recognises the cyclicality of the markets we operate in, ensuring we build a sustainable business for the long term. Looking ahead, we have a robust balance sheet and are confident our portfolios are well matched to customer demand.

At 1,3473p, the share price of Land Securities is up just over 16% so far this year, leaving the FTSE 100 trailing with a rise of 6.5%.  And the longer-term story is similar, with Land Securities’ share price showing a 120% gain, trouncing the 33% increase in the FTSE 100 index.

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Jon Wallis has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.