REIT conversion valuation

Land Securities Group Plc
20 February 2007


Tuesday 20 February 2007


Land Securities Group PLC ('Land Securities'/ 'Group')

LAND SECURITIES REPORTS RESULTS OF VALUATION FOR REIT CONVERSION PURPOSES

Land Securities today reports the results of the valuation of its REIT
qualifying property assets.  This has been carried out in order to assess the
Group's conversion charge as a result of its election to REIT status on 1
January 2007.  The valuation was undertaken as at 31 December 2006 and relates
to the Group's investment portfolio and also to the relevant assets of its
property outsourcing business, Land Securities Trillium.  Based on the
revaluation, Land Securities estimates that its conversion charge will be
approximately £315m, which it will pay in full in July 2007.  This charge
represents 2% of the 31 December 2006 value of the REIT qualifying assets.


Valuation results

The investment portfolio assets were revalued at £14.8bn to show a 1.6% surplus
since the interim results for the six months ended 30 September 2006, and an
8.7% surplus since the last financial year end date of 31 March 2006.

The qualifying property assets of its outsourcing business, Land Securities
Trillium ('LST'), were valued at £931.9m.  These properties are generally not
classified as investment properties for accounting purposes and so are held in
the Group's balance sheet at book value (cost less depreciation).  The valuation
surplus of these assets over their book value of £564.5m at 31 December 2006
amounted to £367.4m or 78 pence per share.

The valuation of LST's qualifying assets does not represent a whole business
valuation.  For example, liabilities on short leasehold properties cannot be
ascribed a negative value for the purposes of assessing the REIT conversion
charge.  This is particularly relevant to LST's largest contract, where the
Department for Work and Pensions is entitled to vacate 7.75 million sq ft of
accommodation over the life of the contract and where 65% of the contract
accommodation is short leasehold.


Effect on net asset value per share

If the Group's last reported net asset value as at 30 September 2006 is adjusted
to reflect the increase in value of the investment portfolio assets between 30
September and 31 December 2006, the Group's adjusted diluted net asset value
increased by 2.2% from 2121 pence per share as at 30 September 2006 to 2168
pence per share as at 31 December 2006.  On the same basis, but after adjusting
for the REIT conversion charge (equivalent to 67 pence per share), the Group's
adjusted diluted net asset value as at 31 December 2006 stood at 2101 pence per
share.   These net asset figures do not include the revaluation of LST's
qualifying property assets which continue to be held in the balance sheet at
book value.  These figures also exclude other movements in shareholders' equity
during the period including any profit or loss.

Francis Salway, Group Chief Executive, commented: 'We are delighted to have
successfully converted to REIT status, a change which triggers a revaluation of
our qualifying property assets outside our normal reporting timetable.  As we
predicted, growth has slowed across the traditional property investment markets,
supporting our decision to focus on expanding our property outsourcing business.

'We have had notable success in securing new property outsourcing business in
the past three months, including the acquisition of Secondary Market
Infrastructure Fund, the Accor hotels transaction and our appointment as
preferred bidder on the Defence Training Rationalisation programme.  As a result
we will be deploying in excess of £2bn of capital to this area of the business.
The one-off valuation of LST's property assets provides an indication to
shareholders of the value inherent in this business and, taken together with our
new business success, we believe that we have provided clear differentiation in
terms of our ability to generate future value for shareholders.'


Highlights

•    Combined investment portfolio including share of joint ventures valued 
     at £14.8bn

•    Investment portfolio valuation surplus of 1.6%
     
•    Strong contribution from development with a 2.9% uplift in value
     
•    Pro-forma adjusted diluted net assets* per share up 2.2% to 2168p;
     after REIT conversion charge at 2101p
     
•    Land Securities Trillium qualifying properties valued at £931.9m - 
     representing a 78p per share increase above book value at 31 December 2006
     
•    Land Securities Trillium entering a new phase of growth with £0.9bn
     invested in acquisitions with the potential to invest a further £1.4bn into
     contracts where it has reached preferred bidder status.

*Based on investment portfolio valuation growth added to 30 September 2006 net
assets.

                                     -Ends-


For further information, please contact:

Francis Salway/Emma Denne                                Stephanie Highett
Land Securities Group PLC                                Financial Dynamics
T [phone] /(0)20 7024 5460                   T [phone]


The company will be holding a conference call for investors and analysts at 
11:00am today, Tuesday 20 February 2007.  Please note the new details of the 
call are as follows:

Dial in numbers:              0845 245 3471 (UK) or [phone]
Conference ID:                9718352
Participants' password:       Land Securities


Notes to editors:

Land Securities is the UK's leading real estate investment trust. Our national
portfolio of commercial property, worth many billions of pounds, includes some
of Britain's best-known shopping centres, such as the Birmingham Bullring and
Gunwharf Quays in Portsmouth, as well as London landmarks such as the Piccadilly
Lights and Westminster City Hall. We are leading urban renaissance through our
billion pound development programme, transforming Exeter, Bristol and Cardiff
city centres as well as key sites in Central London.  We are also one of the
leading names in property outsourcing and through urban community development
are involved in long-term, large-scale regeneration projects in the south-east.


Appendices


Investment property business - valuation results
                                                       Open        Three month           Open         Open
                                                     market          Valuation         Market       Market
                                                      value         Surplus(1)          value        value
                                                   31/12/06           31/12/06       30/09/06     31/03/06
                                                         £m                  %             £m           £m
Retail
Shopping centres and shops                          4,472.9                0.2        4,474.4      4,174.0
Retail warehouses                                   2,440.4                0.2        2,421.5      2,314.6
London retail                                       1,207.5                2.1        1,173.2      1,101.6
London offices
West end                                            2,826.3                3.7        2,966.0      2,416.4
City                                                1,181.9                2.1        1,154.4      1,059.7
Mid-town                                            1,197.2                2.4          848.2        654.8
Inner London                                          822.2                1.6          782.2        675.6
Other                                                 645.0                3.1          619.9        496.2

Combined investment portfolio                      14,793.4                1.6       14,439.8     12,892.9


Notes
     
(1)  The valuation surplus is stated after adjusting for the effect of spreading 
     of rents and rent free periods over the duration of leases in accordance 
     with IFRS but before restating for finance leases.


On the combined investment portfolio the valuation surplus was 1.6%, with the
strongest performance from London offices with a surplus of 2.8%.

In addition, our ongoing extensive development programme, currently valued at
£1.9bn, has continued to be a significant differentiator in terms of
performance, with a valuation surplus of 2.9% for the three months.

Over the last nine months, the valuation surplus from our combined investment
portfolio, including acquisitions and developments, was £1,169.8m or 8.7%.


Land Securities Trillium - valuation results (1)
     
1.         Norwich Union Contract                                                                           £m

            Purchase cost                                                                                 44.5
            Book value as at 31 December 2006                                                             43.3
            Appraised value as at 31 December 2006                                                        51.7

2.         Barclays Bank Contract

            Purchase cost                                                                                 25.2
            Open market value as at 30 September 2006 (2)                                                 27.4
            Appraised value as at 31 December 2006 (2)                                                    27.4

3.         Department for Work and Pensions Contract

            Fair value on acquisition of Trillium/purchase cost (3)                                      404.1
            Other acquisitions                                                                            52.9
            Capital expenditure                                                                          152.1
            Depreciation                                                                                (61.9)
            Disposals                                                                                   (53.4)

            Book value as at 31 December 2006                                                            493.8

            Appraised value as at 31 December 2006: (4) (5)
            DWP occupied                                                                                 797.7
            Let to third parties                                                                           6.2
            Vacant                                                                                        48.9

                                                                                                         852.8



Notes:

(1)  The revaluation of Land Securities Trillium's assets excludes finance
     leases with a book value of £86.7m as at 31 December 2006

(2)  Classified as an investment property

(3)  Properties outsourced under the original PRIME contract are stated in this 
     line at the fair value ascribed to them at the date of Land Securities'
     acquisition of Trillium in November 2000, whereas properties acquired
     subsequently and properties outsourced under the TIES contract extension in
     December 2003 are stated in this line at purchase cost.

(4)  The appraised values as at 31 December 2006 are stated after deduction of 
     estimated gain share payments due to the DWP upon vacation of properties by
     them.
     
(5)  The vacant possession values of DWP properties as at 31 December 2006
     were:

     DWP occupied                                 £524.8m
     Vacant                                        £48.9m


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