Half-yearly results for the six months ended 30 September 2016

"Land Securities has produced a resilient performance against the backdrop of current market uncertainty thanks to the actions we've taken to transform our portfolio and reduce gearing over the last few years.

“Our strong leasing performance and lower interest costs have contributed to a 4.5% rise in revenue profit despite the significant disposals made in the second half of last year. While valuations across our markets are under pressure, leading to a 1.8% reduction in our adjusted diluted net assets per share to 1,408p, our portfolio has outperformed its market sectors," said Chief Executive Robert Noel.

"In London, we’ve entered the final phase of our £2.4 billion development programme. In the City and mid-town, all schemes are now complete and fully let. In Victoria, SW1, our transformation of the area into a vibrant destination is now clear to see, with Nova due to complete in the new year.

"In Retail, we’ve reinvested the proceeds from the sale of our secondary assets into dominant destinations that attract retailers and deliver the experience consumers want. At our latest destination, Westgate Oxford, we have a fabulous line-up of retailers and restaurants and the scheme is on target for opening this time next year.
"We’ve followed a clear strategy to transform the quality of our business. And now, with historically low levels of speculative development and conservative financial gearing, we’re well-placed to take advantage of any opportunities that may lie ahead.”

Results summary

1. An alternative performance measure. The Group uses a number of financial measures to assess and explain its performance, some of which are considered to be alternative performance measures as they are not defined under IFRSs. For further details, see the Business Analysis section included within the half-yearly results.

2. Including our proportionate share of subsidiaries and joint ventures, as explained in the notes to the financial statements included within the half-yearly results.

3. The % change for the valuation deficit represents the decrease in value of the Combined Portfolio over the six month period, adjusted for net investment.

4. Our key valuation measure.

Activity

• £15.0m of investment lettings
• £6.9m of development lettings
• Acquisitions, development and refurbishment expenditure(1) of £194.0m
• Disposals(1) of £90.9m
• Supported a further 114 people from disadvantaged backgrounds into jobs through our Community Employment Programme

Performance

• Ungeared total property return(1) of 0.5% (IPD Quarterly Universe 0.2%)
• Total business return(2)(3) of -0.5%
• Combined Portfolio(3) valued at £14.4bn, with a valuation deficit(3) of 1.8%
• Voids(1) in the like-for-like portfolio: 2.9% (31 March 2016: 2.4%)

Financials

• Group LTV ratio(3) at 22.6%, based on adjusted net debt(3) of £3.3bn
• Weighted average maturity of debt at 9.0 years
• Weighted average cost of debt at 4.7%
• Cash and available facilities of £1.5bn
• First half dividend of 17.9p, up 9.8%

Development

• 1 & 2 New Ludgate, EC4 now fully let
• 20 Eastbourne Terrace, W2 now completed and 90% let
• 1 New Street Square, EC4 now completed and fully let
• Nova, Victoria, SW1, due to complete in the new year, now 41% pre-let or in solicitors’ hands
• Westgate Oxford due to open in October 2017, now 64% pre-let or in solicitors’ hands
• 1.2m sq ft future London pipeline including 21 Moorfields, EC2; Nova East, SW1; 1 Sherwood Street, W1; and our Southwark estate, SE1

Recognition

• Achieved Carbon Disclosure Project 2016 climate change leadership score of A-
• Winner of 2016 Better Society Award for National Commitment to the Community
• Shortlisted for Energy Efficient Partnership of the Year at the Energy Awards 2016

1. For further details see the Business Analysis section included within the half-yearly results.

2. Dividend paid per share in the period plus the change in adjusted diluted net assets per share, divided by adjusted diluted net assets per share at the beginning of the period.

3. An alternative performance measure. The Group uses a number of financial measures to assess and explain its performance, some of which are considered to be alternative performance measures as they are not defined under IFRSs. For further details see the Business Analysis section included within the half-yearly results. All measures above are presented on a proportionate basis, as explained in the notes to the financial statements included within the half-yearly results.

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