Land Securities Reports a £4.74 Billion Loss

Land Securities, one of the largest UK property companies, warned the specialists of the property industry on Wednesday, May 13th, that market conditions remain tough and that the company has suffered a £4.74 billion decline in the value of its portfolio last year. The firm reported a pre-tax loss of £4.74 billion in the value of its portfolio for the last year to the end of this March, which was caused by continuously falling property prices. The company believes that their experience reflects the overall market conditions, in which the property industry was put since last year. Company’s experts say that the year of 2008 was characterised by record rapid falls in the property value and dramatic reaction to the worsening financial and economic conditions. It is very important to note that Land Securities, which owns the Birmingham Bullring shopping mall, the Cardinal Place office complex and the Piccadilly Lights, has always been considered the bell-weather in the property industry. Francis Salway said that although the conditions in some areas of the property sector do slightly improve, the company still expects conditions to be challenging as vacancies will increase and rental values will decline, putting pressures on the amount of rental income. The company also reported that its adjusted diluted net asset value (NAV) has dropped by 66.4% and now constitutes 593 pence per 1 share; as of at the end of March, firm’s investment properties are being valued at £7.93 billion. The good news is that company’s gross rental income increased by £14.3 million across its London property divisions, and the bad news is that the amount of vacancies in the firm’s portfolio increased to 4.6%, compared to 3.5% last year. Despite all the problems, Land Securities claims that its financial future is quite optimistic as it has been strengthened by sale of £1.1 billion of assets and an equity issue in February, which amounted to £756 million.