Land Securities sees first-half profits surge on stronger portfolio

Real estate group Land Securities reported a massive increase in profits in its first half and a higher net asset value (NAV), saying that its portfolio is "now in much stronger shape".

Pre-tax profit totalled £1,031m in the six months to 30 September, compared with just £397.9m the year before, with basic earnings per share rising to 130.6p from 50.8p.

However, revenue profit, Land Securities' measure of underlying profit which excludes certain items, rose by 8.6% to £170m.

NAV per share rose 10.7% year-on-year to 1,183p.

Over the six months, the group said it has seen values rise and yields fall across every category of its portfolio due to strong investors demand for commercial property, specifically shopping centres and London offices. Values were up 7.5% overall, equal to a valuation surplus of £880.2m.

During the period the firm acquired a 30% stake in Bluewater in Kent - "the pre-eminent shopping centre outside London" - and the remaining 50% in Buchanan Galleries in Glasgow, as well as selling off some retail assets in Sunderland, Bristol, Exeter and Hull.

£185.8m was generated from sales, while £697m was spent on acquisitions.

"During a busy six months, we have made significant progress executing our strategy to transform our Retail Portfolio and deliver our 2.9m square foot London development programme into a supply constrained market," said chief executive Robert Noel.

"And our strategy is generating good results. We delivered a valuation surplus of £880.2m across the portfolio with adjusted diluted NAV up 11.5%."

The group lifted its interim dividend by 3.9% to 15.8p per share.