Shopping centre giant drives shares in property

Published on Tuesday 17 May 2011 22:38

Property shares built up solid gains yesterday as one of the sector's biggest players posted forecast-beating annual results and said its key markets were in recovery mode.

Land Securities, owner of a string of major shopping centres including The Centre in Livingston and Aberdeen's Bon Accord, reported a double-digit rise in net asset value - a key industry measure.

Chief executive Francis Salway said there would be "price ripples" in the current financial year but the group still saw strong growth opportunities, particularly in London.

North of the Border, where the firm's other assets include a joint stake in Glasgow's Buchanan Galleries, more deals were said to be "in the pipeline" following 41 lettings in the year.

Last December, Land Securities acquired the 420,000sq ft Overgate centre in Dundee from a Lend Lease venture. The 141 million deal was one of the biggest of its kind in recent years.

Land Securities yesterday said it saw "huge potential" in the site, where it has already agreed deals with a number of new retailers including Apple specialist Stormfront and fashion label Superdry.

Meanwhile, Livingston's The Centre is set to expand to more than 1 million sq ft thanks to a deal agreed with Primark at the end of last year. A Superdry branch is also expected to open at the complex this summer.

Katherine Armstead, portfolio manager for Land Securities in Scotland, said: "The past year has been an extremely exciting time for us in Scotland thanks to the addition of a new shopping centre to our retail portfolio.

"Despite tough trading conditions in the sector, we have continued to let retail space across Aberdeen, Glasgow, Livingston and Dundee, attracting high street favourites and international brands - in total, 41 lettings at a rent of 6.5m.

"With more deals in the pipeline we remain committed to strengthening our position in Scotland and further increasing the value of our assets."

Shares in the group closed up 6.4 per cent at 795.5p, while British Land enjoyed a 4.6 per cent rise. Many property companies have bounced back strongly from the industry slump that preceded the recession, although the downturn also claimed several victims.

Land Securities, which forms part of the FTSE 100 index, said its basic net asset value per share in the 12 months to 31 March rose 18 per cent year-on-year to 885p.

It reported a 14.8 per cent jump in pre-tax profits to just over 1.2 billion, while the retail and London portfolios saw strong valuation growth of 8.5 per cent and 10.8 per cent respectively.

The group said it was looking for potential developments in London after accelerating its construction plans to build on a predicted surge in demand for office space.