Land Securities, the UK’s biggest property company, has broken through the £10bn barrier this morning following an upbeat interim management statement for its third quarter.
The group’s shares rose 15.15p to 1268p in early trading today, taking its market value to £10.03bn.
Sales of £701.6m during the last quarter brought total sales to £886.4m for the nine months to 31 December, 15% ahead of March 2014 valuation.
Meanwhile, acquisitions were £234.6m during the quarter and £933.9m for the nine months. Development expenditure totalled £95.7m in the last three months, bringing the total for the year to date to £312.1m.
Robert Noel, chief executive of Land Securities, said: “Our business and markets are in good shape. In London, rental values are rising due to a shortage of new commercial space just as we are delivering a major programme of office and retail space to the market. Interest in our developments is strong and on terms ahead of our valuers’ most recent estimates.
“In retail, we have completed the transformation of our shopping centre portfolio under our strategic focus of dominance, experience and convenience. Footfall is up and sales are up. Although there is political uncertainty at home and abroad, we expect interest in our schemes to remain strong, reflecting both the quality of our portfolio and the lack of supply in London.”
Land Securities said it had completed the transformation of its shopping centre portfolio during the quarter following the sales of Circus, Bristol, for £267.8m, The Centre and Almondvale West Retail Park, Livingston for £224.1m, and Princesshay, Exeter for £127.9m. The group also bought the remaining 50% interest in Buchanan Galleries, Glasgow for £137.5m.
Of the 1.4 million sq ft of office space remaining to be let in its committed development, the company revealed 87,000 sq ft is currently in solicitors’ hands. It also said 1 & 2 New Ludgate was on target for practical completion in April and The Zig Zag Building and Kings Gate, both in SW1, were on target for completion in July.
Occupancy levels remain strong with £10.9m of investment lettings signed in the quarter, and a further £8m of lettings currently in solicitors’ hands. On a same store like-for-like basis, retailer sales were up 3.2% this quarter on the same quarter last year. On a total sales growth basis, retailer sales were up 3.8% over the same period.
Adjusted net debt in the company has fallen from £4.623bn to £4.179bn, while the group’s gearing fell to 31.4%, compared with 33.6% at the end of the previous quarter. The weighted average cost of debt was 4.6%, with an average duration of 8.5 years.
A third interim dividend of 7.9p a share will be paid on 10 April 2015, entirely as a Property Income Distribution (PID), to shareholders on the register at 13 March 2015.