Interim Results. Part 3
Land Securities Group Plc
17 November 2004
PART 3
Business Analysis
6 months ended 30 September 2004
P&L basis: P&L basis: P&L basis:
Open Open Open Gross Gross Gross
Market Market Market Valuation Valuation Rental Rental Rental
Value (6) Value (6) Value (6) Surplus Surplus Income Income Income
30-Sep-04 31-Mar-04 30-Sep-03 Surp/(def) Surp/(def) 30-Sep-04 31-Mar-04 30-Sep-03
PORTFOLIO ANALYSIS £m £m £m £m % £m £m £m
The like-for-like portfolio (1)
Shopping centres & shops
Regional shopping centres 1,129.3 1,062.8 1,055.3 65.2 6.2% 35.6 37.0 35.2
Central London shops 646.6 625.5 599.7 20.7 3.3% 20.2 19.6 19.0
Other in-town shops 470.9 436.3 413.6 25.9 5.8% 13.7 14.6 14.1
_______ _______ _______ _______ _______ _______ _______ _______
2,246.8 2,124.6 2,068.6 111.8 5.3% 69.5 71.2 68.3
_______ _______ _______ _______ _______ _______ _______ _______
Retail warehouses
Retail parks 1,110.2 987.6 922.9 75.1 7.3% 25.4 24.6 23.2
Other 212.8 241.1 219.2 9.0 4.4% 7.0 6.7 6.9
_______ _______ _______ _______ _______ _______ _______ _______
1,323.0 1,228.7 1,142.1 84.1 6.8% 32.4 31.3 30.1
_______ _______ _______ _______ _______ _______ _______ _______
_______ _______ _______ _______ _______ _______ _______ _______
Total retail 3,569.8 3,353.3 3,210.7 195.9 5.8% 101.9 102.5 98.4
_______ _______ _______ _______ _______ _______ _______ _______
Offices
West End 1,335.3 1,301.4 1,253.8 47.7 3.7% 44.0 44.1 45.3
City 785.9 756.1 759.4 29.0 3.8% 36.1 37.3 37.0
Midtown 238.0 222.5 214.5 15.4 6.9% 9.5 9.8 10.5
Inner London 75.2 75.3 55.9 (4.3) (5.4)% 2.1 2.4 2.1
_______ _______ _______ _______ _______ _______ _______ _______
Central London offices 2,434.4 2,355.3 2,283.6 87.8 3.7% 91.7 93.6 94.9
Rest of UK 51.2 48.1 46.0 2.0 4.1% 2.1 2.6 2.9
_______ _______ _______ _______ _______ _______ _______ _______
Total offices 2,485.6 2,403.4 2,329.6 89.8 3.8% 93.8 96.2 97.8
_______ _______ _______ _______ _______ _______ _______ _______
Industrial properties
South-east 284.6 257.5 240.3 26.7 10.4% 8.5 8.6 8.3
Other 11.4 11.1 11.3 0.3 2.7% 0.5 0.9 0.8
_______ _______ _______ _______ _______ _______ _______ _______
296.0 268.6 251.6 27.0 10.1% 9.0 9.5 9.1
_______ _______ _______ _______ _______ _______ _______ _______
Other 93.2 88.9 90.0 3.3 3.7% 2.9 3.5 3.2
_______ _______ _______ _______ _______ _______ _______ _______
Like-for-like portfolio 6,444.6 6,114.2 5,881.9 316.0 5.2% 207.6 211.7 208.5
Completed developments (2) 636.0 567.0 539.1 71.4 12.8% 11.9 13.0 6.5
_______ _______ _______ _______ _______ _______ _______ _______
Total 7,080.6 6,681.2 6,421.0 387.4 5.8% 219.5 224.7 215.0
Acquisitions (3) 577.6 243.3 94.3 5.9 1.0% 11.7 6.3 2.8
Sales and restructured (4) - 248.9 841.1 - - 4.0 21.0 35.4
interests
Total development
programme
(Including Kent Thameside) (5) 834.4 733.3 639.7 33.8 4.2% 8.8 5.3 4.0
_______ _______ _______ _______ _______ _______ _______ _______
Total portfolio
excluding joint ventures 8,492.6 7,906.7 7,996.1 427.1 5.3% 244.0 257.3 257.2
Joint ventures 404.3 243.5 - 18.6 4.8% 8.2 0.6 -
_______ _______ _______ _______ _______ _______ _______ _______
Total portfolio 8,896.9 8,150.2 7,996.1 445.7 5.3% 252.2 257.9 257.2
_______ _______ _______ _______ _______ _______ _______ _______
Total portfolio analysis
Shopping centres & shops
Regional shopping centres 1,957.4 1,786.7 1,594.7 113.4 6.2% 57.0 55.4 47.4
Central London shops 836.3 819.7 780.6 24.6 3.0% 23.7 24.2 23.3
Other in-town shops 593.5 584.9 601.1 29.9 5.3% 18.7 19.8 20.0
_______ _______ _______ _______ _______ _______ _______ _______
3,387.2 3,191.3 2,976.4 167.9 5.2% 99.4 99.4 90.7
_______ _______ _______ _______ _______ _______ _______ _______
Retail warehouses
Retail parks 1,193.0 1,051.7 995.3 86.7 7.9% 26.6 25.9 24.3
Other 212.8 241.1 229.9 9.0 4.4% 7.0 7.1 7.4
_______ _______ _______ _______ _______ _______ _______ _______
1,405.8 1,292.8 1,225.2 95.7 7.3% 33.6 33.0 31.7
_______ _______ _______ _______ _______ _______ _______ _______
_______ _______ _______ _______ _______ _______ _______ _______
Total retail 4,793.0 4,484.1 4,201.6 263.6 5.8% 133.0 132.4 122.4
_______ _______ _______ _______ _______ _______ _______ _______
Offices
West End 1,674.0 1,557.3 1,456.5 68.3 4.3% 48.7 48.6 50.1
City 984.8 958.4 975.2 24.9 2.6% 38.4 39.2 38.5
Midtown 332.3 234.2 355.1 14.5 4.6% 10.0 12.3 19.2
Inner London 336.6 221.8 268.2 31.1 10.2% 4.6 4.3 5.4
_______ _______ _______ _______ _______ _______ _______ _______
Central London offices 3,327.7 2,971.7 3,055.0 138.8 4.4% 101.7 104.4 113.2
Rest of UK 71.6 61.6 63.2 3.2 4.7% 2.7 3.4 3.8
_______ _______ _______ _______ _______ _______ _______ _______
Total offices 3,399.3 3,033.3 3,118.2 142.0 4.4% 104.4 107.8 117.0
_______ _______ _______ _______ _______ _______ _______ _______
Industrial properties
South-east 384.0 352.2 376.9 31.3 8.9% 9.9 11.2 11.1
Other 11.4 11.1 39.1 0.3 2.7% 0.5 1.5 1.7
_______ _______ _______ _______ _______ _______ _______ _______
395.4 363.3 416.0 31.6 8.7% 10.4 12.7 12.8
_______ _______ _______ _______ _______ _______ _______ _______
Other 309.2 269.5 260.3 8.5 2.9% 4.4 5.0 5.0
_______ _______ _______ _______ _______ _______ _______ _______
Total portfolio 8,896.9 8,150.2 7,996.1 445.7 5.3% 252.2 257.9 257.2
_______ _______ _______ _______ _______ _______ _______ _______
6 months ended 30 September 2004 (continued)
Annual Annual Annual Annual Annual Annual Annual
Annual Annual Net Net Yield Yield Gross Gross Gross
net net Estimated Estimated on on Estimated Estimated Estimated
rent rent Rental Rental Present Present Rental Rental Rental
(7) (7) Value (8) Value (8) Income Income Value (9) Value (9) Value (9)
30-Sep-04 31-Mar-04 30-Sep-04 31-Mar-04 30-Sep-04 31-Mar-04 30-Sep-04 31-Mar-04 30-Sep-03
£m £m £m £m % % £m £m £m
The like-for-like portfolio
Shopping centres & shops
Regional shopping centres 66.3 64.8 72.3 71.7 5.9% 6.1% 79.3 78.7 75.9
Central London shops 39.3 38.6 42.4 42.2 6.1% 6.2% 43.3 43.0 43.1
Other in-town shops 25.8 25.4 30.4 29.7 5.5% 5.8% 32.7 32.1 31.4
_______ _______ _______ _______ _______ _______ _______ _______ _______
131.4 128.8 145.1 143.6 5.8% 6.1% 155.3 153.8 150.4
_______ _______ _______ _______ _______ _______ _______ _______ _______
Retail warehouses
Retail parks 51.0 49.8 62.1 57.4 4.6% 5.0% 62.1 57.4 57.5
Other 14.3 13.6 16.3 16.1 6.7% 5.6% 16.3 16.1 14.8
_______ _______ _______ _______ _______ _______ _______ _______ _______
65.3 63.4 78.4 73.5 4.9% 5.2% 78.4 73.5 72.3
_______ _______ _______ _______ _______ _______ _______ _______ _______
_______ _______ _______ _______ _______ _______ _______ _______ _______
Total retail 196.7 192.2 223.5 217.1 5.5% 5.7% 233.7 227.3 222.7
_______ _______ _______ _______ _______ _______ _______ _______ _______
Offices
West End 85.2 85.8 92.7 90.2 6.4% 6.6% 94.2 91.7 90.9
City 69.4 70.1 59.4 58.8 8.8% 9.3% 60.1 59.5 59.0
Midtown 13.3 18.6 19.0 18.9 5.6% 8.4% 19.7 19.6 19.8
Inner London 4.6 4.7 5.7 5.6 6.1% 6.2% 5.7 5.6 5.4
_______ _______ _______ _______ _______ _______ _______ _______ _______
Central London offices 172.5 179.2 176.8 173.5 7.1% 7.6% 179.7 176.4 175.1
Rest of UK 4.7 4.7 5.6 5.2 9.2% 9.8% 5.7 5.3 4.8
_______ _______ _______ _______ _______ _______ _______ _______ _______
Total offices 177.2 183.9 182.4 178.7 7.1% 7.7% 185.4 181.7 179.9
_______ _______ _______ _______ _______ _______ _______ _______ _______
Industrial properties
South-east 16.7 16.9 19.9 19.4 5.9% 6.6% 19.9 19.4 19.3
Other 1.2 1.1 1.0 1.0 10.5% 9.9% 1.0 1.0 0.8
_______ _______ _______ _______ _______ _______ _______ _______ _______
17.9 18.0 20.9 20.4 6.0% 6.7% 20.9 20.4 20.1
_______ _______ _______ _______ _______ _______ _______ _______ _______
Other 5.9 5.9 6.1 5.7 6.3% 6.6% 6.2 5.8 5.6
_______ _______ _______ _______ _______ _______ _______ _______ _______
Like-for-like portfolio 397.7 400.0 432.9 421.9 6.2% 6.5% 446.2 435.2 428.3
Completed developments 27.3 22.1 40.6 39.2 4.3% 3.9% 40.6 39.2 38.7
_______ _______ _______ _______ _______ _______ _______ _______ _______
Total 425.0 422.1 473.5 461.1 6.0% 6.3% 486.8 474.4 467.0
Acquisitions 36.8 15.7 38.0 14.2 6.4% 6.5% 38.1 14.3 5.6
Sales and restructured n/a n/a n/a n/a n/a n/a n/a n/a n/a
interests
Total development
Programme
(Including Kent Thameside) n/a n/a n/a n/a n/a n/a n/a n/a n/a
_______ _______ _______ _______ _______ _______ _______ _______ _______
Total portfolio
excluding joint ventures n/a n/a n/a n/a n/a n/a n/a n/a n/a
Joint ventures n/a n/a n/a n/a n/a n/a n/a n/a n/a
_______ _______ _______ _______ _______ _______ _______ _______ _______
Total portfolio n/a n/a n/a n/a n/a n/a n/a n/a n/a
_______ _______ _______ _______ _______ _______ _______ _______ _______
Total portfolio analysis
Shopping centres & shops
Regional shopping centres 110.9 98.2 134.2 120.6 5.7% 5.5%
Central London shops 46.6 47.1 56.9 63.6 5.6% 5.7%
Other in-town shops 32.1 34.4 39.5 40.7 5.4% 5.9%
_______ _______ _______ _______ _______ _______
189.6 179.7 230.6 224.9 5.6% 5.6%
_______ _______ _______ _______ _______ _______
Retail warehouses
Retail parks 53.4 51.6 67.3 61.6 4.5% 4.9%
Other 14.3 13.9 16.3 16.4 6.7% 5.8%
_______ _______ _______ _______ _______ _______
67.7 65.5 83.6 78.0 4.8% 5.1%
_______ _______ _______ _______ _______ _______
_______ _______ _______ _______ _______ _______
Total retail 257.3 245.2 314.2 302.9 5.4% 5.5%
_______ _______ _______ _______ _______ _______
Offices
West End 93.9 94.3 129.0 123.3 5.6% 6.1%
City 79.0 73.5 82.1 76.6 8.0% 7.7%
Midtown 13.3 19.5 19.0 19.7 4.0% 8.3%
Inner London 13.8 6.5 25.4 18.9 4.1% 2.9%
_______ _______ _______ _______ _______ _______
Central London offices 200.0 193.8 255.5 238.5 6.0% 6.5%
Rest of UK 6.8 6.5 7.5 7.3 9.5% 10.6%
_______ _______ _______ _______ _______ _______
Total offices 206.8 200.3 263.0 245.8 6.1% 6.6%
_______ _______ _______ _______ _______ _______
Industrial properties
South-east 20.1 19.2 27.4 26.6 5.2% 5.5%
Other 1.2 1.1 1.0 1.0 10.5% 9.9%
_______ _______ _______ _______ _______ _______
21.3 20.3 28.4 27.6 5.4% 5.6%
_______ _______ _______ _______ _______ _______
Other 11.5 10.0 14.4 12.6 3.7% 3.7%
_______ _______ _______ _______ _______ _______
Total portfolio 496.9 475.8 620.0 588.9 5.6% 5.8%
_______ _______ _______ _______ _______ _______
6 months ended 30 September 2004 (continued)
Lease Lease
Length Length
Voids Voids Voids as at as at
(by ERV) (by ERV) (by ERV) 30th Sept 30th Sept
(10) (10) (10) 2004 (11) 2004 (11)
30-Sep-04 31-Mar-04 30-Sep-03 Median Mean
% % % Years (i) Years (ii)
The like-for-like portfolio
Shopping centres & shops
Regional shopping centres 1.3% 1.0% 1.1% 9.3 9.8
Central London shops 0.7% - 1.4% 7.3 8.9
Other in-town shops 4.3% 4.4% 3.8% 7.5 10.0
_______ _______ _______ _______ _______
1.7% 1.4% 1.7% 8.0 9.6
_______ _______ _______ _______ _______
Retail warehouses
Retail parks 2.4% 2.1% 3.3% 16.8 15.0
Other 1.2% 1.9% - 14.5 12.6
_______ _______ _______ _______ _______
2.2% 2.0% 2.6% 16.3 14.5
_______ _______ _______ _______ _______
_______ _______ _______ _______ _______
Total retail 1.9% 1.6% 2.0% 10.0 11.1
_______ _______ _______ _______ _______
Offices
West End 2.3% 2.5% 1.2% 7.0 9.7
City 3.0% 3.0% 3.6% 3.0 9.1
Midtown 35.5% 6.6% 4.5% 4.8 5.9
Inner London - - - 1.8 2.9
Central London offices _______ _______ _______ _______ _______
6.1% 3.1% 2.3% 4.8 9.0
Rest of UK 10.5% 9.4% 10.4% 1.0 5.5
_______ _______ _______ _______ _______
Total offices 6.3% 3.2% 2.6% 4.8 8.9
_______ _______ _______ _______ _______
Industrial properties
South-east 6.5% 10.8% 9.3% 5.8 5.6
Other - 10.0% - 14.3 18.1
_______ _______ _______ _______ _______
6.2% 10.8% 9.0% 6.0 6.4
_______ _______ _______ _______ _______
Other 1.6% 1.7% 1.8% 7.8 21.0
_______ _______ _______ _______ _______
Like-for-like portfolio 3.9% 2.7% 2.6% 7.0 10.1
Completed developments 1.2% 30.1% 37.5% 11.8 10.9
_______ _______ _______ _______ _______
Total 3.7% 5.0% 5.5% 7.3 10.1
Acquisitions 0.8% 0.7% - 8.5 12.5
Sales and restructured interests n/a n/a n/a n/a n/a
Total development
programme
(Including Kent Thameside) n/a n/a n/a n/a n/a
_______ _______ _______ _______ _______
Total portfolio
excluding joint ventures
n/a n/a n/a n/a n/a
Joint ventures n/a n/a n/a n/a n/a
_______ _______ _______ _______ _______
Total portfolio
n/a n/a n/a n/a n/a
_______ _______ _______ _______ _______
Notes
(1) The like-for-like portfolio includes all properties which have been in the
portfolio since 1 April 2003 but excluding those which were acquired, sold or
included in the development programme at any time during that period.
Capital expenditure on refurbishments, acquisition of headleases and similar
capital expenditure has been allocated to the like-for-like portfolio in
preparing this table. Changes in valuation from period to period reflect this
capital expenditure as well as the disclosed valuation surpluses.
(2) Completed developments represent those properties, previously included in
the development programme, which have been completed, let and removed from the
development programme in the period since 1 April 2003.
(3) Includes all properties acquired in the period since 1 April 2003.
(4) Includes all properties sold (other than directly out of the development
programme), or where the ownership interest has been restructured, in the period
since 1 April 2003.
(5) Ongoing developments are properties in the development programme and Kent
Thameside. They exclude completed developments as defined in note (2) above.
(6) The open market value figures include the group share of the various joint
ventures and exclude properties owned by Land Securities Trillium and Telereal.
(7) Annual net rent is annual rents in payment at 30 September 2004 after
deduction of ground rents. It excludes the value of voids and current rent free
periods.
(8) Annual net estimated rental value includes vacant space, rent-frees and
future estimated rental values for properties in the development programme and
is calculated after deducting expected ground rents.
(9) Annual gross estimated rental value is calculated in the same way as net
estimated rental value before the deduction of ground rents.
(10) Voids represent all unlet space in the properties, including voids where
refurbishment work is being carried out and voids in respect of pre-development
properties. Voids are calculated based on their gross estimated rental value as
defined in (9) above.
(11) The definition for the figures in each column is:
(i) Mean is rent-weighted average remaining term on leases subject to lease
expiry/break clauses.
(ii) Median is the number of years until half of income is subject to lease
expiry/break clauses.
Business Analysis
Investment portfolio valuation
Total investment portfolio analysis
Current gross
rent roll
%
_________
1 Central Government 9.34
2 Allen & Overy 2.83
3 Dresdner Bank AG 2.22
4 DSG Retail (Currys/Dixons /PC World) 2.18
5 J Sainsbury PLC 1.68
6 Argos and Homebase 1.54
7 Metropolitan Police Authority 1.39
8 Arcadia Group 1.21
9 Deloitte & Touche 1.03
10 The Boots Company PLC 1.01
11 The Institute of London Underwriters 0.97
12 MFI 0.97
__________
Total 26.37
Portfolio value by location
% figures calculated by reference to the portfolio value of £8,896.9m
Shopping
centres Retail
Offices and shops Warehouse Industrial Other Total
% % % % % %
Central and Inner
London 37.4 9.9 - 0.1 0.9 48.3
Rest of south-east
and eastern 0.4 5.4 4.6 4.1 1.8 16.3
Midlands 0.1 5.2 2.4 - - 7.7
Wales and south-west 0.2 5.2 1.4 - - 6.8
North, north-west,
Yorkshire and
Humberside 0.1 7.3 5.3 0.1 0.7 13.5
Scotland and Northern
Ireland 0.1 5.1 2.1 - 0.1 7.4
_______ _______ _______ _______ _______ _______
Total 38.3 38.1 15.8 4.3 3.5 100.0
====== ====== ====== ====== ====== ======
Average rents
excludes properties in the development programme and voids
Average Average
rent ERV
£/sq m £/sq m
Offices
Central and Inner London 358 321
Rest of UK 105 99
Retail
Shopping centres and shops n/a n/a
Retail warehouses (including supermarkets) 164 181
Industrial premises and warehouses
London, south-east and eastern 72 74
Rest of UK n/a n/a
Hotels, leisure, residential and other n/a n/a
Note: Average rents and estimated rental values (ERVs) have not been provided
where it is considered that the figures would be potentially misleading (i.e.
where there is a combination of analysis of rents on an overall and Zone A basis
in the retail sector; or where there is a combination of uses; or small sample
sizes).
This is not a like-for-like analysis with the previous year. It excludes
properties in the development programme and voids.
Like-for-like reversionary potential at 30 September 2004
Reversionary potential 30/09/04 31/03/03
(ignoring additional income % of rent roll % of rent roll
from the letting of voids)
Gross reversions 9.5 10.0
Over-rented 7.1 8.0
Net reversionary potential 2.4 2.0
Note: The reversion is calculated with reference to the gross secure rent roll
and those properties which fall under the like-for-like definition as set out in
the Notes to Portfolio Analysis in the Total Investment Portfolio Analysis
above.
Only 44.0% of the over-rented income is subject to a lease expiry or break
clause in the next five years.
% Portfolio by value and number of properties at 30 September 2004
No of
£m Value % properties
0 - 9.99 3.7 72
10 - 24.99 8.7 46
25 - 49.99 20.4 50
50 - 99.99 19.3 24
Over 100 47.9 25
------ ------
100.0 217
====== ======
Note: Excludes properties held through the Scottish Retail Limited Partnership
and the Metro Shopping Fund
Development Pipeline Schedule
Planning - PR = planning received; AS = application submitted; MG = minded to
grant; PI = planning inquiry; OPR = outline planning received
Retail
Estimated/
Actual
Status Status completion Cost
Property Description Size Planning Letting date £m
Shopping Centres
Developments Approved and in Progress
Whitefriars, Canterbury Retail 37,160 sq m 60% July 2005 107
Residential 3,260 sq m
Caxtongate Phase III, Retail 2,240 sq m 100% Jan 2005 5
New Street, Birmingham
Summerland Gate, Exeter Retail 5,380 sq m 55% Mar 2005 12
Residential 1,390 sq m
Rose Lane Canterbury (100%) - Retail 1,500 sq m 76% Nov 2004 3
a limited partnership
Proposed Developments
Broadmead, Bristol (100%) Retail 83,610 sq m PR 2008
The Bristol Alliance - a limited Leisure 9,000 sq m PR
partnership with Hammerson plc Offices 28,000 sq m OPR
Residential 18,740 sq m PR
Princesshay, Exeter Retail 37,360 sq m PR 15% 2007
Residential 7,200 sq m
St David's Cardiff (100%) Retail/ 70,000 sq m OPR 2008
leisure
St David's Partnership - a Residential 39,750 sq m
partnership with Capital Shopping
Centres
Retail Warehouse
Developments Completed
Kingsway Retail Park, Retail 8,650 sq m 55% May 2004 15
Dundee, Phase II Warehouses
Developments Approved and in Progress
Bexhill Retail Park, Extension Retail 3,110 sq m 100% June 2005 12
Warehouses
Almondvale South, Livingston, Retail 5,300 sq m 100% Feb 2005 6
Phase ll a Warehouses
Proposed Developments
Almondvale South, Livingston, Retail 4,180 sq m PR 2005
Phase ll b Warehouses
London Portfolio
Estimated/
Actual
Status Status completion Cost
Property Description Size Planning Letting date £m
Central London and Inner London properties
Developments, let and transferred or sold
Empress State Building, SW6 Offices 41,290 sq m 100% Jul 2003 103
Retail & leisure 2,040 sq m
Developments Completed
30 Gresham Street, EC2 Offices 35,150 sq m Dec 2003 210
Retail 1,300 sq m
Developments Approved and in Progress
Cardinal Place, SW1 Offices 51,130 sq m 4% Aug 2005 254
Retail 9,420 sq m
40 Eastbourne Terrace, W2 Offices 7,640 sq m MG Oct 2005 12
120 Cheapside, EC2 Offices 15,020 sq m MG* Sep 2007 104
Retail 1,500 sq m
Proposed Developments
New Street Square, EC4 Offices 62,340 sq m MG 2008
Retail/Leisure 2,980 sq m
Bankside 2&3, SE1 Offices 34,990 sq m PR 2007
Retail/Leisure 3,160 sq m
Industrial
Developments, let and transferred or sold
Juniper Phase l, Basildon Industrial 21,820 sq m 100% Nov 2001 18
refurbishment Offices 3,660 sq m
Developments Completed
Juniper Phase ll, Basildon Industrial 11,150 sq m 47% Apr 2003 8
Zenith, Basildon Industrial 15,130 sq m 55% Jun 2002 12
Oxonian Park, Kidlington Industrial 11,800 sq m 13% Sept 2003 9
Cobbett Park, Guildford Industrial 11,440 sq m 47% Aug 2002 11
Commerce Way, Croydon Industrial 12,620 sq m 14% Oct 2003 12
Concorde Way, Industrial 11,620 sq m Jun 2004 9
Segensworth, Fareham
Other
Developments Completed
The Gate, Newcastle upon Leisure 17,560 sq m 92% Nov 2002 65
Tyne
*Minded to grant consent obtained after 30 September 2004
Cost (£m) refers to estimated capital expenditure including the cost of third
party acquisitions and excluding finance costs. Letting % is measured by ERV and
shows letting status at 30 September 2004.
Trading Property development schemes and the Kent Thameside project are excluded
from the development pipeline.
Development pipeline - financial statistics
Valuation Cumulative
surplus/ valuation
Book Capital Estimated Estimated (deficit) surplus / Net
value expenditure total capital total 6 mth to (deficit) to Income/
at start to date Expenditure cost 30.09.04 Date (3) ERV
(1) (1) (2) (4)
£m £m £m £m £m £m £m
---------- ----------------- --------------- ------------- ------------- ----------------- ---------
Project
Completed, let
and
transferred out
of
Development
programme or sold
during the year
ended 30.9.04 22 117 121 149 38 1 13
Active
development
programme
(schemes
in progress,
completed but not
let, committed
and authorised) 163 619 877 1,091 33 (85) 85
Proposed
schemes(5) 156 14 966 1,159 n/a n/a 88
Notes
(1) Excludes capitalised interest.
(2) Includes land costs / book value of land and capitalised interest,
but excludes any allowances for rent free periods. Stated net of other receipts
(eg sales of residential units).
(3) Includes FRS3 profit realised on the disposal of property.
(4) Net headline annual rental payable on let units plus net ERV at 30
September 2004 on unlet units.
(5) The book value of the proposed schemes reflects the value as at 31
March 2004 which reflects any value attributable to expenditure prior to 31
March 2004. Therefore the capital expenditure shown in the 'capital expenditure
to date' column represents only that expenditure incurred in the period to 30
September 2004.
Property Outsourcing
Unexpired contract term at 30 September 2004
years
DWP - Prime 13.5
DWP - Employment services (ES) 13.5
BBC 27.0
Norwich Union (NU) 25.0
Telereal (BT) 27.0
Property under management
Freehold Leasehold TOTAL
000 sq m 000 sq m 000 sq m
Offices DWP - Prime 650 1,030 1,680
DWP - ES 226 590 816
BBC 82 - 82
NU 42 73 115
BT 883 609 1,492
Telephone Exchanges BT 3,528 97 3,625
----- ----- -----
Total 5,411 2,399 7,810
===== ===== =====
Under management but estate
not transferred DWP - Prime 67
DWP - ES 40
BBC 290
NU
BT
-----
Total 8,207
=====
Regional breakdown by contract
DWP - Prime DWP- ES BBC NU Telereal Total
000 sq m 000 sq m 000 sq m 000 sq m 000 sq m 000 sq m
Northern Ireland - - - 112 112
London, south-east
and West England 522 351 346 61 2,510 3,789
Northern England 693 241 - 32 1,014 1,980
Scotland 232 80 26 22 453 813
Midlands and Wales 301 184 - - 1,028 1,513
----- ----- ---- ----- ----- -----
Total 1,747 856 372 115 5,117 8,207
===== ===== ==== ===== ===== =====
Number of people by occupation
Total
Asset management 107
Call centre 152
Capital projects 331
Quality assurance 56
Facilities management 685
HR/finance/business development 171
-----
Total 1,502
=====
Note: These figures include all Telereal staff
Property transactions concluded by contract
DWP - Prime DWP - ES BBC NU Telereal TOTAL
No of No of No of No of No of no of
transactions transactions transactions transactions transactions transactions
Sales 2 6 - 2 18 28
New Lettings 25 5 6 5 41
Rent Reviews 22 34 - 33 89
Lease
Renewals 18 8 - 1 27
Freehold
buy-ins 3 - - 2 - 5
Other 5 5 - - 10
--- --- ---- ---- ---- ----
TOTAL 75 58 6 4 57 200
=== === ==== ==== ==== ====
Service partner agreements
Proportion
of service providers'
Service Partner Service Element turnover
Compass Catering <5%
Dalkia Building maintenance 10 - 15%
Group 4 Security 15 - 20%
GS Hall Building maintenance 20 - 25%
ISS Cleaning <5%
MiB Furniture 15 - 20%
MITIE Cleaning <5%
Norland Facilities Management <5%
OCS Cleaning <5%
Securitas Security <5%
Wilson James Security 20 - 25%
Total
Average contract length of above Service Partners: 10.8 yrs
Average contract time remaining of above Service Partners: 8.5 yrs
Average annual contract value of above Service Partners: 16.7 £m / pa
LS Trillium Contract Analysis
Six months to 30 September 2004
Contract Contract Contract Contract Contract
Time DWP DWP Norwich Telereal
Units period PRIME ES BBC Union (50%)
Contract length
Term Years 20 14.5 30 25 30
Expiry date Date Mar-18 Mar-18 Nov-31 Jun-29 Nov-31
_______ _______ _______ _______ _______ _______ _______
Floorspace
Client occupied 1,613 736 81 107 4,891
Sublet 38 22 1 8 132
Vacant 29 57 0 0 94
Total All All 1,680 816 82 115 5,117
Freeholds/valuable Sq m at
leasehold ('000) Sept 04 650 227 82 42 4,411
Leaseholds 1,031 589 - 73 706
Total 1,680 816 82 115 5,117
Estate managed
but not transferred 67 40 290 - -
_______ _______ _______ _______ _______
Income
Unitary charge
(inc sublet income) All All HY 163 96 58 3 82
Client discretionary
projects £m Apr 04 53 - 16 - -
Sales of trading to Sep 04 - - - 85 24
properties
_______ _______ _______ _______ _______
Gross property income 216 96 74 88 106
_______ _______ _______ _______ _______ _______ _______
Costs
Rent payable (51) (34) - (1) (18)
Service partners (43) (26) (26) (1) -
Client discretionary
projects All All (51) - (14) - -
Cost of sales of trading HY Apr to
properties £m Sep 04
(81) (9)
Other costs (43) (24) (24) (2) (13)
_______ _______ _______ _______ _______
Bid costs (1)
Operating profit 28 12 10 2 66
Profit on sale of fixed
assets 1 5 5
_______ _______ _______ _______ _______
Segment profit 29 17 10 2 71
_______ _______ _______ _______ _______
_______ _______ _______ _______ _______ _______ _______
Capital sums
Book value of investment
in JV (53)
_______ _______
Book value of operating
Properties £m 30-Sep-04 470 470 286 11 1,026
_______ _______
_______ _______ _______ _______ _______ _______ _______
Vacation
Allowance utilised to date 57,000 38,000 £2,404K
Available allowance 173,000 62,000 £104K
Future allowance 240,000 128,000 £13,242K
_______ _______ _______ _______ _______ _______ _______
Notes
General
1. Revenues and costs relate to our 50% share of Telereal
Floorspace
1. Values relate to floorspace on 30 Sept 2004
2. Estate managed but not transferred for PRIME and Employment Services
relates to DWP space occupied in other government departments
3. Estate managed but not transferred for BBC relates to the London and
Scotland estate with the exception of White City which did transfer
4. All seven properties sold or to be sold under the Norwich Union contract
have been shown as leaseholds
Income
1. Client discretionary projects are non-contractual works conducted by LS
Trillium or Telereal at the request of the client
2. Other income on Norwich Union contract relates to the onward sale of 6
properties with the completion of the final sale imminent
Costs
1. Property costs excluding rent consists of fees, service charges, empty
rates, insurance, etc.
2. Facilities management costs relate to all hard and soft services e.g.
maintenance, cleaning, security, catering, etc.
3. Lifecycle capital replacement (LCR) accounting policy goes to the level
of individual projects which are either capitalised or written-off as described
below
4. Client discretionary projects are non-contractual works conducted by LS
Trillium or Telereal at the request of the client
5. Overhead costs are based on full time equivalents working on each of the
contracts. In addition, LS Trillium also incurs corporate overheads of approx.
£3.0m relating to senior management, the business development team, etc.
6. Other costs for DWP, BBC and Telereal include estates capital
expenditure, dilapidations, bad debts, profit/loss on sales, other billable
costs, etc.
7. Depreciation relates to fixed assets on the balance sheet.
Capital sums
1. Book value of operating properties for Prime and ES have been combined.
Vacation
1. Vacation allowances on the DWP contract are linked to floorspace while
those on the BT contract are linked to income
2. Vacation on the DWP contract will release a mixture of freeholds and
leaseholds. It may be assumed for forecasting purposes that the tenure split
for vacation is similar to the split shown above
3. Vacation allowances shown above for Telereal relate to freeholds and
valuable leaseholds. In addition, BT have the ability to vacate properties on
pre-specified dates:
a. vacation dates on leaseholds coincide with lease expiry dates
b. BT has vacated most freeholds with pre-specified dates
4. Land Securities Trillium's strategy is to sell the freeholds and sublet
the leaseholds to lease expiry
Accounting
1. Freeholds are held on the balance sheet and depreciated over a period of 50
years
2. Between 50% to 60% of LCR works are capitalised
Depreciation periods range from 15 to 25 years is further limited to the end of
the lease or contract if works relate to leaseholds
Review report by the auditors
Independent review report to Land Securities Group PLC
Introduction
We have been instructed by the Company to review the financial information set
out in the Group accounts and the Notes to the accounts. We have read the other
information contained in the interim report and considered whether it contains
any apparent misstatements or material inconsistencies with the financial
information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with Auditing Standards and therefore provides a lower
level of assurance than an audit. Accordingly we do not express an audit opinion
on the financial information.
This report, including the conclusion, has been prepared for and only for the
Company for the purpose of the Listing Rules of the Financial Services Authority
and for no other purpose. We do not, in producing this report, accept or assume
responsibility for any other purpose or to any other person to whom this report
is shown or into whose hands it may come save where expressly agreed by our
prior consent in writing.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2004.
PricewaterhouseCoopers LLP
Chartered Accountants
London
17 November 2004
This information is provided by RNS
The company news service from the London Stock Exchange KKDD
Latest directors dealings
- 23 minutes ago Bytes Technology Group
- 50 minutes ago Associated British Foods
- 1 hour ago Aviva
- 1 hour ago 3i Group
- 2 hours ago Hammerson