AGM Statement

Land Securities Group Plc
19 July 2006



19 July 2005



            LAND SECURITIES GROUP PLC ('Land Securities' / 'Group')



                             ANNUAL GENERAL MEETING



Francis Salway, Group Chief Executive, and Peter Birch, Chairman, will make the
following remarks at the Group's Annual General Meeting to be held today at
11.30 am in The Sainsbury Wing Theatre, The National Gallery, Trafalgar Square,
London WC2N 5DN.



Francis Salway, Group Chief Executive:



'It gives me great pleasure to be able to report, once again, on a very strong
performance across the Land Securities Group.  I believe that this demonstrates
the integrity of the strategy we introduced some six years ago of allocating a
higher proportion of our capital to property development and to outsourcing.  On
all fronts the business has performed well, with a like-for-like investment
portfolio valuation surplus of 15.9% and a development valuation surplus of
32.9%.



'Land Securities Trillium had another excellent year - as was evidenced by the
sale our share of the Telereal joint venture for a profit of just under £300m,
through which we demonstrated the value inherent in this business.



'Over the past few years our strategy has been to invest more capital into
higher return areas.  This has resulted in increased levels of activity across
the Group, which is probably best demonstrated by the £3.25bn of capital
turnover achieved in the last financial year.



'Notable contributions to this were the acquisition of Tops Estates plc - the
first acquisition of a quoted PLC we have made since the 1960s - and the
acquisition of LxB, a private property company.  These purchases cement our
position as a major force in the retail property market, with our portfolio now
standing at some 20 million square feet.



'In Central London, our repositioning of the portfolio continued.  We sold £400m
of property while reinvesting some £640m on purchases and spending £185m on
development projects such as Cardinal Place which has transformed a rather tired
part of Victoria Street in London.





 'We also continue to make good progress with leasing our development programme.
  Over the course of last year and in the first four months of this, we have
agreed over 700,000 sq feet of development lettings.



'Last year was the first in which we benefited from the Group's new debt
structure.  Given that we are a capital intensive industry, a key driver of our
performance is our cost of debt.  The new debt structure has proven to be very
successful - not only providing us with the lowest cost of debt in the sector
but also with a quick and effective way of financing the business.  For example,
last year we completed a bond issue five days after the relevant board approval
had been given.



'This translates into shareholder value in a number of ways.  Over the past two
years, we have increased the dividend by approximately 25% and rebalanced the
distribution between the final and half-year dividend, which is now more evenly
spread between the two halves of the year.  We have grown our net asset value by
almost 50% over the same period (if you exclude the accounting impact of the
debt refinancing).



'Furthermore, strong business performance, combined with a shareholder appetite
for property, has translated into a strong share price performance.  Over a
two-year timeframe to 31 March 2006, an investor in Land Securities' shares has
received a total shareholder return of 89% - far outstripping the performance of
the FTSE-100 Index.



'Before commenting on our future priorities, I would like to provide a brief
update on market conditions.



'Over the past two to three years we have seen a period of sustained yield shift
across all types of property. This has been driven largely by the lower cost of
debt.  However, we believe that further yield shift is unlikely.



'We have of course benefited from these market conditions.  Our strong valuation
uplifts have not solely been driven by yield shift but also by our asset
management and, particularly, development activities.  This has led to our
investment property business outperforming the market by 2.2% over the past
financial year (as evaluated independently by Investment Property Databank, the
market benchmark).



'In terms of the decisions we are making now to create future value, we are
mindful of the full prices being paid for standing investments.  We are,
therefore, selective when acquiring assets, seeking out property which can
benefit from our asset management expertise or that offer future development
potential.



'Turning now to the occupier markets, the picture here is a little mixed.  We
certainly have not had a bubble in retail rents, but life is undoubtedly tougher
for retailers, who are coming under pressure from rising costs and static sales.
  However, this is not universally true of all retailers.  Our experience to
date is that retailers are still seeking to take new space, particularly in
dominant locations, but they are now taking longer to commit and letting
incentives such as rent-free periods are rising.





 'In terms of London offices, market conditions have improved significantly over
the last year.  The West End is particularly buoyant with little Grade A office
stock available and we have set new rental highs for the Victoria office market
on lettings at our Cardinal Place development.  In the City, as we predicted two
years ago, rental growth is now just becoming evident.  We started construction
works on one million square feet of offices in London last year which we
consider to be well timed as we believe we are now entering a period of stronger
growth in rental values for London offices.



'In terms of the Group's future priorities, as I have already mentioned, we are
committed to property development as a way to create superior value for
shareholders and our development programme will involve investing £3.1bn in
development projects over the next few years.  Development is both a high
return, and potentially a higher risk, activity and we have in place rigorous
risk management criteria against which we evaluate each scheme.  We also have
overall risk criteria to limit the total size of our programme to ensure that
our dividend remains covered should we fail to reach our lettings targets.



'In London, we are currently delivering schemes at New Fetter Lane, Bankside (on
the South Bank near Tate Modern), and One New Change on Cheapside.  In retail,
we are on-site in Cambridge, Exeter, Bristol and Corby with future schemes in
Cardiff and Livingston.



'This development programme, which has created substantial value for
shareholders to date, is a key differentiator for us as a Group.



'Our second priority is to grow Land Securities Trillium and over the past 12
months we have identified two potential new areas for investment.  First is the
Building Schools for the Future ('BSF') programme, where the Government intends
spending up to £40bn over the next 15 years renewing the country's secondary
schools.  In January of this year, we invested in a joint venture called
Investors in the Community with the Mill Group.  Through this vehicle, we have
already invested in a BSF project in Bristol and are targeting similar
opportunities in Peterborough, Leeds and Waltham Forest.



'Second is the Defence Training Review where, as part of the Metrix Consortium
with QinetiQ, we are bidding on two packages addressing the combined training
requirements for the entire armed forces.  Our consortium is proposing a major
new training centre to be developed at St Athan in Wales together with a number
of smaller facilities across the UK.  QinetiQ are leading the training side of
the bid and we are leading the property accommodation element.  We hope to have
a decision on this bid by the Autumn.



'In addition we are shortlisted for a property outsourcing contract on the
Northern Ireland Civil Estate.



'I would now like to turn to the subject which has dominated commentary on the
quoted property sector for the last year, namely Real Estate Investment Trusts
(REITs).  We were delighted that when the Government legislation was unveiled it
was less restrictive than we thought might be the case during the consultation
process.  Some of the detail in the legislation and the accompanying regulations
is still to be finalised, and it is for this reason that we have not yet made a
formal decision to convert to REIT status.  However, based upon the current
draft legislation, we believe that it will be highly attractive to our
shareholders for the Group to convert to a REIT and we expect to do this from 1
January 2007.  Converting to a REIT will require a change to our Memorandum and
Articles of Association and an EGM will be convened this Autumn for this
purpose.



 'I would like to stress that REITs represent a change to the Group's tax
status, not a change to its corporate form.  The tax changes involved mean that
no corporation tax or capital gains tax will be payable on qualifying property
activities, which will clearly be beneficial to us.  In return, we will need to
pay a conversion charge equal to 2% of the gross value of our assets and then
meet certain conditions for operating as a REIT.



'These conditions are currently met by Land Securities in its present form and
with our current strategy.  In particular, Land Securities Trillium can continue
to be part of Land Securities Group as a REIT, and a high proportion of
Trillium's current profits will be tax exempt.  Indeed, across the whole Group,
we expect around 90% of our profits to be tax exempt.



'So, for a conversion charge estimated at £270 million (based on our balance
sheet at 31 March 2006), we expect annual tax savings of around £75 million per
annum - and a freedom to recycle assets within our investment portfolio without
triggering capital gains tax liabilities.



'It is our intention to distribute the tax saved as additional dividend.  This
is likely to result in an increase in our dividend of approximately one third on
a full year basis post REIT conversion (coming on top of the 25% increase over
the last two years).



'For a private shareholder, the benefit of the increase in dividend will be
partially, but only partially, offset by the fact that the REIT property income
dividend will attract a 22% withholding tax.  The dividend will be taxed at
shareholders' normal tax rate with a credit being attributed to the 22%
withholding tax.



Peter Birch, Chairman, concluded:



'I would briefly like to summarise the strong position of the Land Securities
Group.  We have now established our track record in terms of the returns we are
generating from the investment portfolio and tightened our business focus onto
areas where we have market leading positions. We are more active on the
development front and we are growing Land Securities Trillium and, indeed, have
already proven our ability to create value through these activities.  Our debt
structure is highly effective and provides competitive advantage in terms of
cost of capital.



'Finally, we are about to enter a new environment for property as an asset class
with the introduction of REITs.  We are very excited about the prospects this
offers shareholders as a tax transparent way of investing in a highly liquid,
publicly quoted property vehicle.



'All in all, your company is in great shape and poised to grasp new
opportunities in the future.'









For further information, please contact:



Francis Salway/Emma Denne
Land Securities Group PLC
Tel: [phone]


Stephanie Highett / Dido Laurimore
Financial Dynamics
Tel: [phone]



NOTES TO EDITORS



Land Securities Group PLC



Land Securities is a FTSE 100 company, quoted on the London Stock Exchange.  It
has been at the forefront of the UK's commercial property industry for over 60
years.



Today, the Group maintains its market leading position as the UK's largest
quoted property company by providing commercial accommodation and property
services to a wide range of occupiers. The Group's objective is to create
attractive and sustainable returns for its shareholders through its activities,
which include property investment, development and property outsourcing.



Land Securities holds a market leading position in three areas of the UK
commercial property market:



•         Retail,

•         London offices and

•         Property outsourcing.



Its £12.9 billion combined investment portfolio totals six and a half million
square feet, including office and retail space in Central London, 30 shopping
centres, 30 retail parks and 10 supermarket properties located across the UK.



It has a substantial development programme including major retail-led urban
regeneration schemes and Central London mixed-use developments.  The Group is
also master planning one of Europe's largest regeneration schemes in Kent
Thameside.

The Group leads the market in property outsourcing where, through Land
Securities Trillium, it provides accommodation and property-related services to
the Department for Work and Pensions, Norwich Union, Barclays Bank, DVLA and
through Telereal to BT.



The Group is committed to environmental initiatives and community involvement
recognised by the Group's inclusion in the FTSE4Good and the Dow Jones
Sustainability Indices.



For more information on Land Securities visit www.landsecurities.com






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