Land Securities has completed more than £350m of sales in the second quarter and reduced its net debt by 5.5% as it prepares to take advantage of buying opportunities and restart its development pipeline in 2010.

In a confident interim management statement this morning the UK's largest REIT said that investor interest was ‘now evident for both prime and mid-quality properties’.

It said this interest ‘underlined Land Securities' view that the peak to trough fall in values is likely to be in line with the 45 - 50% assumption used by the company in sizing its rights issue.’

Land Secs said that during the second quarter it continued to make property sales to fund its committed development expenditure and it has completed £357.4m of sales at 2.7% below its March 2009 valuation, at an average yield of 7.7%.

It has also completed an additional £162.m of sales since 30 June at 2.5% below the March 2009 valuation, at an average yield of 7.4%.

Its development and portfolio capital expenditure costs were £73.8m this quarter. It completed £6.6m a year of lettings this quarter including £2.3m a year of development lettings.

Its net debt (including joint ventures) is down 5.3% to £4,482.6m from £4,732.6m. The average duration of the group's debt is 9.6 years with a weighted average cost of debt of 4.2%.

Chief executive Francis Salway said that having strengthened its balance sheet in terms of both gearing ratios and liquidity to meet maturing bank facilities, it was assessing acquisition opportunities and was ‘firming up plans for a start during 2010 on two major London West End developments at Park House and Selborne House.’

He said: 'Our actions and the market trends have been consistent with our statements since the turn of the year.

'This has contributed to achievements during the quarter in line with our plans and leaves us well positioned for the next stage of the cycle.

'With a strengthened balance sheet we are now assessing opportunities for new investment.

'We maintain our view that patience is a virtue and that opportunities will arise over years not just months, particularly in terms of disposals by banks.

'We are confident that our financial flexibility and scale will give us competitive advantage to capitalise on these opportunities as the cycle turns.'

Land Securities shares closed yesterday at 440p and rose nearly 2% in early trading this morning.

Topics