Land Securities and British Land report rise in profits

Land Securities Group PLC have reported a rise in profits for the first 6 months ending in September.

The largest Real Estate Investment Trust in the UK reported a net income of £11.9 million, compared with a loss of £1.73 billion a year earlier. Adjusted net asset value dropped 4.7% to 565 pence per share. The increase in profits is thought to be due to property values falling at a slower rate. British Land, the UK’s second largest Investment Trust also reported it’s first quarterly profit in more than 2 years. Net income for the three months ending 30th September was £161 million, compared with a loss of £747 million a year earlier.

British Land’s net asset value rose 3.1% to 372 pence per share. In September the company agreed to sell 50% of the Broadgate Office Complex in London, it’s biggest asset, to Blackstone Group LP. They sold the property in a bid to cut debt and take advantage of low prices by making acquisitions.  The company last year wrote off more than £3 billion from the value of its estate.

Chris Griggs, Chief Executive of the company, said they’re now looking to invest in a “wider range” of properties, not just shops and offices. But he insisted they would be “patient and act in a disciplined manner” as it rebuilt its portfolio.

Meanwhile Land Securities has indicated it is ready to start work on it’s first development since 2006. Chief Executive, Francis Salway, plans to spend between £750 million to £1 billion on future opportunities and £380 million on three West End properties. Work will begin on these in 2010 and is expected to be completed in 2 or 3 years time.

Francis Salway said: “We are confident that, from the low point in July 2009, property values will rise over the next five years with the profile characterised by ripples rather than pure straight-line growth as residual risks and imbalances in financial markets play out. We are prepared to be patient for the best opportunities and we will not rush our investment programme, as we expect a broader range of opportunities to emerge once banks begin to take action on their property loan portfolios.”

It’s thought these latest results are the biggest indicator the UK property market might be over the worst of the recession.

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