Land Securities (LSE: LAND) shares dipped almost 3% to around 945p in Wednesday morning trading, despite an upbeat first-quarter update from management.
The group reported it had signed £5.5m of development lettings and £6.0m of investment lettings since 1 April 2013, with a further £12.3m and £11.4m currently in solicitors’ hands, respectfully.
According to today’s release, Land Securities’ London real-estate portfolio is continuing to perform well. Chief executive Robert Noel commented:
“In London, demand is increasing and we remain confident that our portfolio is well positioned and our developments well timed.”
The group said that 20 Fenchurch Street development — aka ‘The Walkie Talkie Tower’ — is now 52% pre-let, with a further 4% in solicitor’s hands, and that construction on the first £768m phase of its redevelopment of Victoria Circle known as ‘Nova’ was now underway.
Outside of London, Land Securities’ retail property portfolio continues to face some headwinds, with Noel commenting:
“Overall, the retail market remains challenging but we are maintaining very high levels of occupancy in our centres and are pleased with our increased exposure to leisure.”
Land Securities said that, despite a number of retailers going into administration since 1 April including Dwell, Modelzone and Ortak, units in administration were down at 2.2% at 30 June 2013 compared to 2.3% at 31 March 2013.
Void periods in its like-for-like retail portfolio were flat at 2.9% for the period. The group also announced that the first interim dividend payment for the current financial year would be 7.6p per share.
With Land Securities shares currently trading at their net asset value and a forward P/E of 25, only you can decide whether they represent a ‘buy’ at this price. Indeed, broker opinion remains divided, only three brokers currently rating the shares a ‘Strong Buy’ and 11 as a ‘Hold’.
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> Andy owns shares in Land Securities.
