U.K.'s Biggest Office REIT Gets Ready for Post-Brexit Splurge
(Bloomberg) -- Land Securities Group Plc is ready to get back to building once Brexit is out the way.
The U.K.’s second-largest real estate investment trust, having taken a cautious approach to new projects since 2014, could reverse its policy as soon as Britain leaves the European Union, Chief Executive Officer Robert Noel said in an interview.
- The company has a 3 billion-pound ($3.9 billion) pipeline of projects that can start from April. That includes a trio of office developments where work could start without tenants in 2019.
- A decision on whether to commit to new speculative projects will be taken after Britain quits the EU in March. It would reverse a 2014 decision not to start any more new projects without first securing tenants.
- The company’s pipeline also includes a large new office project that could start as early as 2020 and will definitely be built speculatively, Noel said.
- “We approach Brexit with an appropriate balance of low risk and exciting future prospects,” Noel said in the interview.
- The company’s cautious strategy of securing long leases and filling its entire office portfolio positioned it to cope with an overheating London office market and rocky Brexit. That paid off with increased profits and earnings per share in the six months through September.
- “We like these results and view the shares as priced for distress in equity markets or property markets,” JPMorgan Chase & Co. analysts including Tim Leckie wrote in note to clients Tuesday.
- To read about Land Securities fiscal first-half earnings, click here.
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