* FY adjusted diluted NAV 1,013p vs f'cast 1,003p
* Sees London office shortage lasting only to late 2016
* Shares down 2.4 pct, retreat from six-year high
(Adds CEO comments, details)
By Brenda Goh
LONDON, May 15 Land Securities,
Britain's largest listed property developer, predicted London's
acute office space shortage will only last till late 2016 as it
announced an end to its strategy of building speculatively.
The builder of London's "Walkie Talkie" skyscraper, which
four years ago embarked on the construction of more about 2.5
billion pounds ($4.2 billion) of offices without lettings in
place, said on Thursday it would now only commit to schemes when
it had secured pre-lets.
Its move, which shows its belief that a tenant demand-supply
imbalance favouring such developers could start to taper off,
contrasts with the stance of rival British Land, which
said earlier this week it planned to spend more on schemes in
London and southeast England.
"The risks have changed," Land Securities Chief Executive
Rob Noel told reporters on Thursday, adding there was growing
competition for sites as more firms have been able to obtain
"We have moved from a period of below-average development
completions in London at very low construction costs, which is
what we've taken advantage of, and we're moving now into a
period of potentially above-average delivery with higher
Land Securities shares were down 2.4 percent by 0935 GMT,
having risen in the previous session to a six-year high.
Many construction projects in London stalled or were shelved
after the financial crisis as lending dried up. Office
completions hit a 25-year low in 2012, but building activity has
since picked up, with 71 schemes under construction, Deloitte
Real Estate said in January.
Noel said the company's future development pipeline would
now be weighted towards retail, where it is selling schemes to
plough more cash into city centre and edge-of-town developments.
The company posted a higher-than-expected 12.2 percent rise
in adjusted diluted net asset value to 1,013 pence per share for
the year to March 31, versus a forecast of 1,003p, according to
a company-supplied consensus.
Net asset value is a key measure for developers as it
reflects the value of their buildings.
($1 = 0.5960 British Pounds)
(Editing by Kate Holton and David Holmes)