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May 20, 2010
Land Securities Leads Revival In London Construction
Property development leader Land Securities coupled its £1 billion profit with an announcement that it is reigniting its London construction projects. The company believes it has seen the bottom of the much beleaguered office market and is hoping its 1.2 million square feet of new developments will be open just in time for demand for high end office space to return.
Central London office space has taken a heavy beating from the recession, as companies have been wary of moving into new offices in an uncertain economy. Companies stayed with current leases, avoiding the temptation to upgrade to more luxurious office space. This constraint has resulted in an oversupply of office space and general halt to construction efforts.
As the market begins to thaw, Land Securities has positioned itself to take advantage. It has already increased its net assets by 17% per share and is moving to grow further through the purchase of Targetfellow’s £400 million portfolio currently indebted to HBOS.
In addition to its acquisitions, Land Securities is continuing construction on its current City projects, including the Heron Tower, the Pinnacle and the Shard. On the whole, this is an indication that construction is waking from its recession-era hibernation and preparing for a significant increase in demand for luxury office space over the next few years.