Gladstone Land Corporation Annual Report 1999

FY1999 Annual Report · Gladstone Land Corporation

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L A N D S E C U R I T I E S
Report and Financial Statements 31 March 1999

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Contents

Corporate Statement
Financial Highlights
Valuation
Chairman’s Statement
Operating and Financial Review
Chief Executive‘s Review
The Group’s Developments
Offices
Shops and Shopping Centres
Retail Warehouses and
Food Superstores
Hotels, Leisure and Residential
Warehouses and Industrial
Financial Review

Environment and Health & Safety

1
2
4
6

8
10
12
16

20
23
24
27
32

Corporate Governance
Report of the Remuneration Committee
Directors’ Report
Directors and Advisers
Senior Management
Directors’ Responsibilities
Auditors’ Report
Valuers’ Report
Consolidated Profit and Loss Account
Balance Sheets
Consolidated Cash Flow Statement
Other Primary Statements
Notes to the Financial Statements
Ten Year Record
Major Property Holdings
Investor Information

33
35
38
40
41
42
42
43
44
45
46
47
48
62
63
(Inside Back Cover)

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FINANCIAL CALENDAR

1999

2000

January

Interim dividend payable

26 May
7 June
11 June

14 July
26 July
November

Preliminary Announcement
Ex-dividend date
Registration qualifying date
for final dividend
Annual General Meeting
Final dividend payable
Announcement of interim
results (unaudited)

LAND SECURITIES PLC

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Corporate Statement

We are committed to providing our shareholders
with sustainable and growing returns underpinned
by secure and increasing income, together with
capital appreciation.

We deliver these returns by developing and investing
for the long term to create and enhance a portfolio
of high quality commercial properties to meet the
needs of our customers.

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LAND SECURITIES PLC

Financial Highlights

N E T R E N TA L I N C O M E

* R E V E N U E P R O F I T ( P R E -TA X )

P R E -TA X P R O F I T

P O S T-TA X P R O F I T

* A D J U S T E D E A R N I N G S P E R S H A R E

* A D J U S T E D D I LU T E D E A R N I N G S P E R S H A R E

D I V I D E N D S P E R S H A R E

D I V I D E N D C OV E R ( t i m e s )

31 March

1999

1998

Change %

Ten Year

Compound

Growth %

£427.5m

£414.1m

£292.7m

£265.9m

£293.3m

£266.0m

£216.4m

£196.7m

39.11p

38.86p

29.50p

1.31

37.07p

36.77p

28.00p

1.30

+3.2

+10.1

+10.3

+10.0

+5.5

+5.7

+5.4

+7.0

+6.1

+6.5

+6.4

+7.4

D I LU T E D N E T A S S E T S P E R S H A R E

975p

910p

+7.1

+1.4

P R O P E R T I E S

B O R R O W I N G S

E Q U I T Y S H A R E H O L D E R S ’ F U N D S

G E A R I N G

‡ G E A R I N G ( n e t )

† I N T E R E S T C OV E R ( t i m e s )

£6,910.5m £6,435.7m

£1,569.3m £1,652.3m

£5,470.4m £5,001.5m

28.7%

19.8%

3.03

33.0%

22.1%

2.72

* Excludes results of property sales.
‡ Total borrowings less short term deposits, corporate bonds and cash, as a percentage of equity shareholders’ funds.
† Number of times that interest payable is covered by operating profit and interest receivable.

REVENUE PROFIT (PRE-TAX)
£m

ADJUSTED DILUTED EARNINGS PER SHARE
pence

241.3

238.7

235.7

265.9

292.7

DIVIDENDS PER SHARE
pence

DILUTED NET ASSETS PER SHARE
pence

25.0

26.0

27.0

28.0

29.5

34.3

33.7

32.9

36.8

38.9

691

688

774

910

975

LAND SECURITIES PLC

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LAND SECURITIES PLC

Valuation

The portfolio was valued by Knight Frank at over £6.9bn at 31 March 1999. After adjusting for
sales, acquisitions and other expenditure, the value increased by 5.1%. A more detailed breakdown
by sector is provided this year, including comprehensive analyses of the Group’s valuation and
rental income.

Last autumn, property yields were adversely affected by turmoil in the international markets and
concerns about the rate of future economic growth in the UK. The subsequent improvement in
sentiment has restored confidence and generally property yields strengthened, and this
improvement has continued since 31 March. Within the portfolio, the best performance came from
offices in the West End, shopping centres in the stronger towns and cities and in the relatively small
leisure sector where we renegotiated the lease of the London Hilton on Park Lane. Retail
warehouses, an outstanding performer for most of the 1990s, provided only a small valuation
increase, as rental growth has been more subdued than for some time. Shops in the West End and
Victoria, which had shown exceptional growth in the previous year, also experienced a year of
consolidation, with rental levels in Oxford Street falling from the peak levels of early 1998, and
other in-town shops produced little capital growth.

After excluding those properties in the schedule of developments and refurbishments on pages 10
and 11 which were producing less than half of their anticipated income at 31 March, together with
other vacant pre-development holdings, the value of the portfolio at 31 March 1999 was £6.63bn.
At the same date the annual rent roll, net of ground rents and excluding the same properties, was
6.6% of this figure. The lower yield on present income compared with the previous valuation
mainly reflects an improvement in the reversionary potential of the portfolio.

ANALYSIS OF VALUATION SURPLUS
% increase/(decrease) on prior year

OFFICES

West End and Victoria

City and Midtown

Elsewhere

10.0

3.0

3.9

SHOPS AND SHOPPING CENTRES

Shopping centres

Central London shops

Other in-town shops

RETAIL WAREHOUSES AND
FOOD SUPERSTORES

Parks

Other

WAREHOUSES AND
INDUSTRIAL

HOTELS, LEISURE AND
RESIDENTIAL

7.5

(0.1)

1.2

1.7

2.9

5.2

15.5

OVERALL SURPLUS

5.1

RENTAL INCOME BY TYPE
year ended 31 March 1999

PORTFOLIO VALUATION BY TYPE
at 31 March 1999

PORTFOLIO VALUATION BY LOCATION
at 31 March 1999

41.1%

39.2%

OFFICES

SHOPS AND
SHOPPING CENTRES

40.3%

38.7%

10.2%

RETAIL WAREHOUSES
AND FOOD SUPERSTORES

11.9%

6.6%

2.9%

WAREHOUSES AND
INDUSTRIAL

HOTELS, LEISURE
AND RESIDENTIAL

5.6%

3.5%

NORTH, N.W.,
YORKSHIRE &
HUMBERSIDE
£931.9m | 13.5%

E. & W. MIDLANDS
& E. ANGLIA
£531.7m | 7.7%

SCOTLAND
& N. IRELAND
£610.0m | 8.8%

GREATER LONDON
& HOME COUNTIES
£1,019.9m | 14.7%

WALES & SOUTH WEST
£448.1m | 6.5%

CITY & MIDTOWN
£1,206.6m | 17.5%

WEST END & VICTORIA
£2,162.3m | 31.3%

Portfolio valuation by tenure
at 31 March 1999

O F F I C E S

W E S T E N D A N D V I C T O R I A

C I T Y A N D M I D T O W N

E L S E W H E R E I N T H E U N I T E D K I N G D O M

S H O P S A N D S H O P P I N G C E N T R E S

S H O P P I N G C E N T R E S

C E N T R A L LO N D O N S H O P S

O T H E R I N -T O W N S H O P S

R E TA I L WA R E H O U S E S A N D F O O D S U P E R S T O R E S

PA R K S

O T H E R

WA R E H O U S E S A N D I N D U S T R I A L

H O T E L S , L E I S U R E A N D R E S I D E N T I A L

Leasehold

Over 50
years to run

Under 50
years to run

Total

£m

82.9
291.9
38.8

399.5
161.2
397.9

75.3
4.1

6.0

5.8

6.9
40.2
–

–
3.6
–

–
–

0.1

2.3

1,437.3
1,157.3
191.3

1,208.9
576.1
885.6

617.1
207.6

389.4

239.9

20.8
16.7
2.8

17.5
8.4
12.8

8.9
3.0

5.6

3.5

Freehold

£m

1,347.5
825.2
152.5

809.4
411.3
487.7

541.8
203.5

383.3

231.8

5,394.0

1,463.4

53.1

6,910.5

P E R C E N TAG E BY T E N U R E

78.0

21.2

0.8

100.0

Freeholds include £371.1m of leaseholds with unexpired terms in excess of 900 years.
Where properties include mixed uses, their values have been apportioned accordingly.

% YIELD ON PRESENT INCOME
at 31 March

% YIELD ON PRESENT INCOME
by sector at 31 March 1999

OFFICES

SHOPS AND SHOPPING
CENTRES

RETAIL WAREHOUSES AND
FOOD SUPERSTORES

WAREHOUSES AND
INDUSTRIAL

HOTELS, LEISURE AND
RESIDENTIAL

6.9

6.3

6.0

8.2

5.7

LAND SECURITIES PLC

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LAND SECURITIES PLC

Chairman’s Statement

I am pleased to make my first annual statement at a time when
Land Securities is strongly positioned to enter a new phase of growth.

increased

Land Securities enjoyed a year of positive
growth. Pre-tax profits rose by 10.3% to
£293.3m. Net assets
from
£5,001.5m
to £5,470.4m following a
valuation uplift of 5.1%. Diluted net assets
per share increased by 65p to 975p per share.
The Group generated cash flow for investing
of £73.5m and has a strong balance sheet
with capacity to take advantage of further
opportunities. After taking into account the
current strength of the Company, the Board
recommends a final dividend of 21.65p per
share, an increase of 6.1% over that for the
previous year, making a total distribution for
the year of 29.50p, an increase of 5.4%. The
dividends paid and proposed will be covered
1.31 times.

We have made progress with our substantial
development programme during the year and
continue to expand it, while at the same time
seeking to maximise returns from our
existing portfolio. As many of our proposed
developments are complex and require
considerable commitment of time and
resources, a strong balance sheet is essential
to provide us with the financial flexibility to
pursue long term programmes.

a period of
considerable
Following
uncertainty,
the UK economy is showing
some signs of recovery and the property
industry is generally in good shape. The
supply and demand equation is in reasonable
balance and there is currently relatively little
speculative development in progress. While
rental and capital growth may have

disappointed some optimistic expectations of
a year ago, the overall performance should be
viewed in the context of a headline annual
inflation rate of less than 2%. Property
performance should not be judged in the
short term and, measured by total returns,
Land Securities was the only one of the top
ten property stocks by market capitalisation
to outperform the sector in each of the past 5,
10, 15 and 20 years*.

With the introduction of European Economic
and Monetary Union, we have reviewed our
investment policy but continue to believe that
we can best serve the interests of our
shareholders by operating exclusively in the
UK market, where we can generate better
returns and benefit from our specialist
knowledge and experience.

in particular,

We will maintain our focus on creating
investments which we believe will provide
the
the strongest growth;
provision of major city centre retail and
mixed use schemes in anticipation of our
customers’ requirements. We will continue
to rationalise our smaller holdings and
larger
concentrate on
investments which will achieve dominance
in their catchment area, thereby attracting
the strongest tenant demand. There is
potential to add to shareholder value by
further exploiting our existing portfolio and
we will also use our considerable resources
to take advantage of other opportunities
that will provide our shareholders with a
positive return.

creating

the

Right
Ian Henderson
and Peter Birch

My predecessor,
John Hull, has been a
director since 1976 and was Chairman from
December 1997 until the Annual General
Meeting in July 1998. His active involvement
in the business, his knowledge of property
and wise counsel over many years of change
and growth will be much missed when he
retires at this year’s Annual General Meeting.
My colleagues and I are most grateful to him
for all he has done for the Group and wish
him a long and happy retirement.

It is with great sadness that I have to report
the death of Louis Freedman, who was the
founding Chairman of Ravenseft Properties
Limited and a long serving director of Land
Securities. We owe much to his drive and
enthusiasm.

I am most grateful to Ian Henderson and his
management team for their support during
my first year as Chairman. Land Securities
is fortunate to have such professional and
dedicated staff.
I should like to thank
them all on behalf of the shareholders for
their contribution. The outlook is positive
and I believe that Land Securities is well
placed to continue to provide increasing
shareholder value.

P E T E R G . B I R C H

*Source: Datastream

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LAND SECURITIES PLC | Operating and Financial Review

Chief Executive’s Review

Developing quality assets and creating value is our core strategy in the
current low inflation environment.

The strong rental and capital growth which
had been apparent from the beginning of
1998 continued during the first quarter
of the period under review. However, the
major economic problems in Asia, Russia
and Brazil caused serious concern in the
autumn and affected the confidence of
investors and tenants alike. The worst
prophecies, of a major contraction in
demand for City offices, have proved
unfounded but consolidation among
financial institutions continues. Confidence
has started to return but the slowdown in
the UK economy, together with a low level
of inflation, means that rental growth
generally is likely to be subdued this year.
Inflation will no longer flatter performance
and, in the prevailing economic circum-
stances, we will continue to focus on those
sectors where we expect to obtain the
best returns.

Against this background, in the year under
review we have extended our development
programme from an estimated £650m
to
some
over £1,050m, providing
6.3m ft2 (585,000 m2). Property additions
amounted to £267.3m, of which £154.3m
has been incurred on our development
activity. We have also continued the
rationalisation of our existing portfolio,
with disposals of a further £125.4m. In the

last three years proceeds from sales
amounted to almost £600m and we have
reduced the number of properties in the
portfolio by almost 20%. We plan to make
further disposals of properties which do
not meet our investment criteria.

Developing quality assets and creating
value is our core strategy in the current low
inflation environment. The priority is to
maximise the return from our £6.9bn
portfolio and to pursue good long term
opportunities. By maintaining a strong
focus on working our portfolio, we can
deliver an investment return not just on the
new capital being introduced but also by
enhancing the performance, and hence the
yield, on our existing holdings. This policy
should provide a significantly higher
return than that which we could expect
from acquiring completed investments.

The Group is concentrating on develop-
ments which will contribute to the
regeneration of our town and city centres.
Demand continues to polarise towards the
dominant
the
country. We anticipated this trend and are
meeting occupiers’ future requirements by
exploiting our key holdings. We will extend
the development programme accordingly.
Town and city centres can provide a unique

throughout

locations

range of social, cultural and leisure
facilities and we fully endorse Government
policy supporting their revitalisation and
the adoption of a wider mix of uses. In
response to increasing competition and the
potential impact of electronic retailing, city
centres must provide an accessible,
shopping
attractive and
environment.

stimulating

We have started on site at Sunderland and
Livingston and are making good progress
with our central London developments.
We recently announced The Birmingham
Alliance,
limited partnership with
Hammerson plc and Henderson Investors,
in which we will jointly undertake a
redevelopment to provide up to 2.7m ft2
(250,840 m2) of retail space in the city
centre. This project will provide a cohesive
strategy for the revitalisation of retailing
in Birmingham. It will be a good long term
investment in a city which is currently
under-provided with adequate shopping.
We report more fully on our development
programme later in this review.

Major schemes, requiring complex site
assembly and planning approval, particu-
larly in sensitive city centres, are inevitably
challenging to deliver. However, we are
confident that we have the teams and

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Operating and Financial Review | LAND SECURITIES PLC

following the forthcoming revaluation, by
adopting a graduated approach to such
adjustments. Any further increase in stamp
duty must also be strongly resisted, as it
will reduce liquidity and the investment
appeal of UK property.

In the prevailing environment of low
inflation, correct sector and asset allocation
is crucial.We shall continue to invest where
the best growth will be achieved.

I A N J . H E N D E R S O N

balance sheet strength to take on these
commitments. Most of the programme
comprises city centre retail, where our
policy is to commence development only
when a substantial proportion of future
income is secured by pre-letting.
In
addition to our enlarged programme, we
are considering a number of significant
potential schemes which could add
substantially to our total expenditure.

and manage our portfolio. We made a
number of promotions to the boards of
subsidiary companies which will further
strengthen the Group and provide the new
directors with the opportunity to widen
their experience and develop their careers
within the Group. We also completed the
reorganisation of the management of our
regional portfolio with the opening of our
Leeds office last November.

Occupational demand remained strong for
most of the year under review and we have
achieved significant pre-lettings at our
retail developments in Sunderland and at
Tottenham Court Road W1. We have also
pre-let the last 73,500 ft2 (6,790 m2) of
offices at 2 Theobald’s Court WC1.

The increase of 5.1% in the value of our
portfolio this year means that valuation
increases in the last three years have
averaged nearly 9%,
in a period when
inflation averaged 2.7%. Our portfolio is
underpinned by an average yield on
present income at 31 March 1999 of 6.6%
which compares favourably with current
returns on long gilts, and is a source
of strength during a period of low
economic growth.

We have a strong management team to
implement our development programme

I referred last year to the discussions
concerning the creation of more liquid
vehicles for property ownership. The
debate continues and the outcome is
dependent mainly on the granting of tax
transparency. To be able to take advantage
of a favourable result, it is important to
retain our financial flexibility.

The issue of maintaining the competitive
position of the UK remains of paramount
importance. The introduction of European
Economic and Monetary Union and the
continuing process of consolidation within
major business sectors increases pressure
on London to provide, on competitive
terms, the quality of space and flexibility of
lease required by occupiers. In order to
withstand competition from the other
major European cities, it is essential that
the Government limits the effects of any
in Uniform Business Rate
changes

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LAND SECURITIES PLC | Operating and Financial Review

The Group’s Developments

The successful completion and letting of
the major extension to our shopping centre
at Bootle marked the end of our previous
development programme.

further projects

We have added
to
the current development programme,
enlarging the overall size to some 6.3m ft2
(585,000 m2).The new projects, including
the substantially revised proposals for
Birmingham, are highlighted on the
schedule opposite.

The estimated capital cost has increased
from some £650m to over £1,050m
exclusive of interest and the book value of
those holdings in our portfolio prior to
assembling this programme. This estimate
includes some £40m relating to completed
projects and about £185m to those in
progress. A breakdown is given in columns
1 and 2 of the schedule opposite. By the
year end we had spent approximately
£180m on the programme with the
balance to be expended over a number
of years.

Many of the schemes are at the planning and
design stages and will only proceed if they
are viable.
If all of the wholly owned
schemes go ahead they would produce over:

• 1,769,000 ft2 (164,340 m2) of new

shopping development

• 678,000 ft2 (62,990 m2) of shopping

centre refurbishment

• 1,008,500 ft2 (93,690 m2) of central

London offices

• 773,000 ft2 (71,810 m2) of leisure
• 481,500 ft2 (44,730 m2) of retail

warehouses

• 480,300 ft2 (44,620 m2) of
warehouses and industrial.

In addition, we will also have a one-third
in The Birmingham Alliance
interest
projects of 2.68m ft2 (248,970 m2)
and half interests in the 256,000 ft2
(23,780 m2) Designer Outlet and Leisure
Centre in Livingston and the 193,600 ft2
(17,990 m2)
led mixed use
leisure
development at Hungate,York.

A number of other potential developments,
some of which are mentioned in this
review, are also under consideration and
if
they proceed the estimated cost of
the revised programme will increase
substantially.

Fully let or agreed to be let
Part let or agreed to be let
£m refers to estimated capital expenditure

COMPLETED DURING THE YEAR
ENDED 31 MARCH 1999

STRAND CENTRE, BOOTLE
Multi-storey car park and 92,000 ft2
(8,550 m2) extension to existing
shopping centre. Completed November
1998 (in previous development
programme).

(cid:2) TOWER CENTRE, BALLYMENA

175,000 ft2 (16,260 m2) shopping centre
refurbishment. Completed August 1998.
£2.4m.

STRATFORD CENTRE,
STRATFORD E15
290,000 ft2 (26,940 m2) shopping
centre refurbishment. Completed
August 1998. £5.3m.

(cid:2) WILLIAMSON SQUARE, LIVERPOOL

55,000 ft2 (5,110 m2) retail development.
Completed November 1998. £6.2m.

(cid:2) GREAT BARR, BIRMINGHAM

83,500 ft2 (7,760 m2) hypermarket.
Replacement of existing buildings.
Completed April 1998. £3.5m.

SLOUGH RETAIL PARK (FORMERLY
TWINCHES LANE RETAIL PARK)
36,500 ft2 (3,390 m2) development of
industrial holding to extend retail park.
Completed May 1998. £4.9m.

(cid:2) MIDDLETON ROAD, BANBURY

240,000 ft2 (22,300 m2) high bay
warehousing/distribution space.
Completed October 1998. £11.2m.

PUMP LANE, HAYES
33,500 ft2 (3,110 m2) warehouse units.
Completed December 1998. £1.7m.

CENTURION PARK, TAMWORTH PHASE II
141,800 ft2 (13,170 m2) high bay
warehousing/distribution space.
Completed January 1999. £4.2m.

(cid:2)
✛
(cid:2)
(cid:2)
(cid:2)
(cid:2)
Operating and Financial Review | LAND SECURITIES PLC

IN PROGRESS AT 31 MARCH 1999

PROPOSED FUTURE DEVELOPMENTS

✛ ALMONDVALE CENTRE,

LIVINGSTON – DESIGNER
OUTLET CENTRE
180,000 ft2 (16,720 m2) retail
and 76,000 ft2 (7,060 m2) leisure,
including multiplex cinema
(joint ownership with BAA
McArthurGlen). Completion due
August 2000. £38.0m.

✛ NUNEATON

13,000 ft2 (1,210 m2) retail units.
Completion due October 1999.
£1.4m.

✛ THE BRIDGES, SUNDERLAND

PHASE II
265,000 ft2 (24,620 m2) retail.
Completion due September 2000.
£38.1m.

* MIDDLETON ROAD, BANBURY

PHASE IV
65,000 ft2 (6,040 m2) high bay
warehousing/distribution space.
Completed May 1999. £4.5m.

* 2 TEMPLE AVENUE EC4

31,000 ft2 (2,880 m2) air
conditioned office refurbishment.
Completion due May 1999. £9.2m.

1 THEOBALD’S COURT WC1
(FORMERLY ADASTRAL
HOUSE)
124,000 ft2 (11,520 m2) air
conditioned offices. Completion
due July 1999. £29.0m.

2 THEOBALD’S COURT WC1
(FORMERLY LACON HOUSE)
205,000 ft2 (19,040 m2) air
conditioned offices with 4,500 ft2
(420 m2) retail and a further
6,000 ft2 (560 m2) leisure facility.
Completion due August 1999.
£45.5m.

6/17 TOTTENHAM COURT ROAD
W1
56,500 ft2 (5,250 m2) retail,
2,500 ft2 (230 m2) offices and
nine residential units. Residential
element sold April 1999.
Completion due July 1999. £8.7m.

✛ CAXTONGATE PHASE II, NEW
STREET AND CORPORATION
STREET, BIRMINGHAM
40,000 ft2 (3,720 m2) retail and
residential accommodation.
Completion due November 1999.
£7.6m.

*(cid:2) ALMONDVALE CENTRE,
LIVINGSTON PHASE I
213,000 ft2 (19,790 m2) shopping
centre refurbishment. Completion
due June 1999. £4.7m.

* ESSO HOUSE/GLEN HOUSE

(INCLUDING 16 PALACE STREET)
SW1
500,000 ft2 (46,450 m2) air
conditioned offices and
140,000 ft2 (13,010 m2) retail.

GULF HOUSE W1
100,000 ft2 (9,290 m2) air
conditioned offices and 20,000 ft2
(1,860 m2) additional retail.

†* ST ALBAN’S HOUSE SW1
46,000 ft2 (4,270 m2) air
conditioned office refurbishment.

PRINCESSHAY, EXETER
465,000 ft2 (43,200 m2) retail
development with some
residential accommodation.

COPPERGATE CENTRE, YORK
PHASE II
240,000 ft2 (22,300 m2) retail
development with some
residential accommodation.

* EMPRESS STATE BUILDING SW6

560,000 ft2 (52,030 m2)
proposed conversion to a 504
bedroom hotel.

CAXTONGATE PHASE III, NEW
STREET AND CORPORATION
STREET, BIRMINGHAM
70,000 ft2 (6,500 m2) retail and
mixed use.

NEWGATE STREET, NEWCASTLE
UPON TYNE
207,000 ft2 (19,230 m2)
leisure complex, including
multiplex cinema.

THE BIRMINGHAM ALLIANCE
(Partnership with Hammerson plc
and Henderson Investors:)

* BULL RING, BIRMINGHAM
1.2m ft2 (111,480 m2)
retail development.

* MARTINEAU GALLERIES
PHASE I, BIRMINGHAM
180,000 ft2 (16,720 m2)
retail development.

* MARTINEAU GALLERIES
PHASE II, BIRMINGHAM
Up to 1.3m ft2 (120,770 m2)
retail and leisure development.

WHITEFRIARS, CANTERBURY
400,000 ft2 (37,160 m2) retail
development with some residential
accommodation.

* HUNGATE, YORK

193,600 ft2 (17,990 m2) leisure
and mixed use development (joint
ownership with Evans of
Leeds PLC).

†* KINGSWAY RETAIL PARK,

DUNDEE
220,000 ft2 (20,440 m2) partial
redevelopment and extension to
retail warehouse park.

† QUEENS ROAD RETAIL PARK,

MANCHESTER
95,000 ft2 (8,830 m2) retail
warehousing.

* LAKESIDE RETAIL PARK,

THURROCK
46,500 ft2 (4,320 m2) extension
to retail warehouse park.

* Added or significantly changed

during 1998/99

† Included in capital commitments

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✛
✛
LAND SECURITIES PLC | Operating and Financial Review

Offices

• In central London limited supply supports rental levels
• Strong demand in West End and Victoria
• 1 and 2 Theobald’s Court offices pre-let

Our portfolio is principally in the City, Midtown, West End and Victoria areas of London where
we expect good long term growth.

The valuation reflected the stronger market in the West End and Victoria where restrictions on the
creation of new supply supported higher levels of rental growth and an improvement in yields
compared with the City and Midtown.

Our major refurbishments at 1 and 2 Theobald’s Court WC1 and 2 Temple Avenue EC4 are
progressing well and we have continued with our rolling programme of refurbishment at Portland
House SW1.

1 Theobald’s Court is pre-let to Warner Bros. and since the year end the first eight floors have been
handed over on time. The offices at 2 Theobald’s Court are pre-let and are due to be completed in
August. 2 Temple Avenue is attracting tenant interest ahead of our proposed marketing campaign.
American Express now have leases on 93,500 ft2 (8,690 m2) at Portland House, having taken a
further 44,000 ft2 (4,090 m2) during the year.

In the West End and Victoria, we have applied for planning permission for the substantial rebuilding
of Gulf House W1 and are preparing plans for a major office and retail development of 640,000 ft2
(59,460 m2) on the sites of the existing Esso and Glen Houses and 16 Palace Street SW1.

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VALUATION AT 31 MARCH 1999

£2,785.9m

RENTAL INCOME FOR YEAR ENDED 31 MARCH 1999

£186.2m

% OF GROUP VALUATION

40.3

VALUATION %

VALUATION BY LOCATION

41.5

51.6

CITY & MIDTOWN

WEST END & VICTORIA

6.9
ELSE-
WHERE

E. & W. MIDLANDS
& E. ANGLIA
£30.6m | 1.10%

RENTAL INCOME %

45.0

45.8

CITY & MIDTOWN

WEST END & VICTORIA

9.2
ELSE-
WHERE

WEST END & VICTORIA
£1,437.3m | 51.59%

GREATER LONDON
& HOME COUNTIES
£128.4m | 4.61%

CITY & MIDTOWN
£1,157.3m | 41.54%

ELSEWHERE IN THE UK
£32.3m | 1.16%

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LAND SECURITIES PLC | Operating and Financial Review

Offices continued

Since the year end we have purchased the
freehold of Elliot House, Bressenden Place
SW1, which is adjacent to some of our key
holdings in the area. This investment has
the benefit of a planning permission for a
new 90,000 ft2 (8,360 m2) office building.

We acquired the long leasehold interest in
Chatham Place, East Harding Street EC4
which we propose to incorporate in the
potential redevelopment of our adjacent
New Fetter Lane holdings; meanwhile we
have secure income from the property.

Above
Dashwood House,
Old Broad Street EC2

Right
7/8 Essex Street WC2

level of over-renting and also allowed us to
benefit from rent reviews on a number of
our properties.

During the last calendar year there was a
record level of take up of office space in
central London which is unlikely to be
repeated this year. Despite the lower rate of
economic growth, there is relatively little
supply available to meet new demand,
particularly in the West End and Victoria.
However,
the potential for increased
development both in the City and Canary
Wharf may affect future rental and capital
growth in those areas.

In order to extend our holdings in the
immediate vicinity, we purchased a
28,100 ft2 (2,610 m2) office investment at
7/8 Essex Street WC2.

We also bought the freehold of Dashwood
House, Old Broad Street EC2 to consolidate
our interest in this property.

At Bowater House, Knightsbridge SW1,
prior to the expiry of Rexam PLC’s lease in
June 2000, we are in discussion with the
sub-tenants with a view to granting new
relatively short term leases to enable a
redevelopment to be planned to suit our
overall development programme. Terms
have been agreed for approximately 55% of
the space at rents considerably in excess of
the income received under the existing
lease, which does not provide for reviews.

The planning application for a change
of use of Empress State Building SW6,
from offices to an hotel, is still under
consideration by the local authority.

We continue to seek opportunities to
upgrade the office portfolio whenever
possible and maintain a high standard of
service to our customers. During the year
we have let or agreed to let some 217,000 ft2
(20,160 m2) in the City and Midtown
and 321,400 ft2 (29,860 m2) in the West
End and Victoria, reducing our office voids
to 1.5% by rental value.
Increased
estimated rental values have reduced the

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1 and 2 Theobald’s Court WC1

LAND SECURITIES PLC | Operating and Financial Review

Shops and Shopping Centres

• Encouraging rental growth in strong centres
• Development programme located principally in towns and cities

which dominate their catchment area

• Commitment to urban regeneration through a wide range of

public and private sector partnerships

• Continuing rationalisation through sales of secondary centres

and high street shops

Despite mixed messages from recent trading statements issued by retailers and limited growth in
consumer expenditure, we are encouraged by the strength of demand for the best retail units in the
strongest locations. This experience confirms our belief that by creating the dominant centres in
major cities we should achieve long term outperformance. Our current development programme is
therefore mainly in towns and cities where we can add value to our existing shopping centres.

At Bootle, our Strand Centre now totals some 400,000 ft2 (37,160 m2), following the successful
completion of the 92,000 ft2 (8,550 m2) second phase, together with a new multi-storey car park
and bus station.

In Liverpool, we concluded the purchase of the 55,000 ft2 (5,110 m2) Williamson Square retail
scheme which is fully let and adjoins our St Johns Centre, where we have agreed to let the Beacon
tower to Liverpool Radio City for their new operational headquarters. Planning permission has been
obtained for the erection of a skyline advertising display which will offer a unique opportunity for
a major international brand.

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VALUATION AT 31 MARCH 1999

£2,670.6m

RENTAL INCOME FOR YEAR ENDED 31 MARCH 1999

£177.6m

VALUATION %

VALUATION BY LOCATION

45.3

21.6

33.1

SHOPPING CENTRES

CENTRAL
LONDON
SHOPS

OTHER IN-TOWN
SHOPS

RENTAL INCOME %

44.9

18.2

36.9

NORTH, N.W., YORKSHIRE
& HUMBERSIDE
£578.3m | 21.65%

E. & W. MIDLANDS
& E. ANGLIA
£321.3m | 12.03%

SCOTLAND
& N. IRELAND
£514.4m | 19.26%

GREATER LONDON
& HOME COUNTIES
£316.1m | 11.84%

WALES & SOUTH WEST
£364.4m | 13.65%
CITY & MIDTOWN
£41.8m | 1.56%

WEST END & VICTORIA
£534.3m | 20.01%

% OF GROUP VALUATION

SHOPPING CENTRES

38.7

CENTRAL OTHER IN-TOWN
LONDON SHOPS
SHOPS

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LAND SECURITIES PLC | Operating and Financial Review

Shops and Shopping Centres continued

At Livingston we will complete the
refurbishment of Almondvale Phase I later
this year, which will complement the
Phase II development, providing a fully
integrated shopping centre of 520,000 ft2
(48,310 m2). Construction has also
commenced on the 256,000 ft2 (23,780 m2)
designer
centre,
outlet
being developed
in association with
BAA McArthurGlen, in which we have a
50% interest. Opening is planned for
the summer of 2000. Following its
completion, Livingston will provide a
regional centre for shopping and leisure of
some 1m ft2 (92,900 m2), of which 76%
will be in our ownership.

shopping

We have continued refurbishing our
shopping centres and have completed
schemes at Stratford E15 and Ballymena.
Works are also underway to remodel retail
space at Ballymena to create ten new shops,
subject to
five of which are pre-let
completion of lease documentation.

In Birmingham we
continue our
development of Caxtongate. Phase I is fully
let and Phase II, which
includes a
residential conversion of the upper floors,
is under construction. Over 50% of the
shop rent roll has been secured by lettings
to leading fashion retailers and we have
agreed terms to dispose of the residential
content by way of a long lease.

Following our announcement in February
of the formation of The Birmingham
Alliance to develop the new Bull Ring
and Martineau Galleries shopping centres,
we are in the process of concluding
legally binding documentation with

The Bridges Sunderland –
Phase II

ft2
In central London our 56,500
(5,250 m2) development at 6/17
Tottenham Court Road W1 will be
completed later this summer. Over 83% of
the rent roll for these shops has either
been secured or is agreed subject to
completion of lease documentation, and
the residential content has been forward
In Victoria we have exchanged
sold.
contracts to let the ground floor of Saga
Petroleum House to J Sainsbury for a new
“Local” format store.

We have begun construction in Sunderland
on the 265,000 ft2 (24,620 m2) extension
to The Bridges which, when combined
with our existing shops, will create a centre
of 515,000 ft2 (47,850 m2). Some 75%
of
the additional rent is secured or
agreed subject to completion of lease
documentation.

Hammerson plc and Henderson Investors.
The partnership arrangements provide
the Group with one-third interests in
both developments.

The Birmingham Alliance will be working
closely with the City Council to renew and
regenerate the eastern side of the city.
The partnership has been established
to maximise the values of the founders’
the
property
development and management of the
largest city centre retail regeneration
project ever undertaken
in Europe.
This will provide an opportunity to create
two major shopping centres totalling
almost 2.7m ft2 (250,840 m2).

interests

through

We propose to start Phase I of Martineau
Galleries in April 2000 with completion
one year thereafter. At the Bull Ring, work
on the new market hall is planned to start
this summer following which the site will
be cleared and the redevelopment will
commence in the autumn of 2000 with
completion programmed for the autumn
of 2003. The development of Martineau
Galleries Phase II is planned to follow the
completion of the Bull Ring.

In York, we are working with the Council
to revise our proposals, with the intention
of submitting a new planning application
for a 240,000 ft2 (22,300 m2) extension to
the Coppergate Centre this summer.

At Canterbury,
following the grant of
detailed planning permission for the
400,000 ft2 (37,160 m2) Whitefriars
development, we are awaiting the outcome
of the compulsory purchase inquiry for

Operating and Financial Review | LAND SECURITIES PLC

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the Government’s

of shopping centres and retail investments,
including
latest
guidelines on retail and transportation
policy. The potential effects of electronic
shopping, in its various applications, will
also influence retailers’ preferences for type
and location of property. While it is
premature to assess the long term effects of
this new technology on shopping patterns,
it is likely to have a greater impact on the
than on
sale of convenience goods
comparison shopping. Our objective is to
increase the appeal of our centres by
making shopping a more enjoyable activity.

Our development programme will create
major retail centres in towns and cities
which will dominate their catchment
areas and which should deliver good
future growth.

481-485 Oxford Street W1

Acquisitions
existing
adjacent
ownerships have been completed in a
number of locations including Canterbury
and Exeter.

At St David’s Centre, Cardiff we completed
the purchase of
the City Council’s
remaining financial interest following
which we now receive all the income from
the centre.

In strengthening our relationships with
retailers and their agents, our in-house
leasing team continues to maintain market
awareness and to let shops through our
‘Talk Direct’ campaign. We have recently
opened our new marketing suite in Mayfair
Place W1 to complement these activities.

to meet

The benefit of working closely with our
tenants
their occupational
requirements is demonstrated by the
transaction completed with Hennes &
Mauritz in Oxford Street for the expansion
of their existing Marble Arch unit. This
involved the acquisition of the leases of
two adjoining shop premises to create this
flagship store of 16,500 ft2 (1,530 m2).

We continue to participate in many Town
Centre Management initiatives throughout
the United Kingdom and in the work of the
British Council of Shopping Centres, the
English Historic Towns Forum and the
British Urban Regeneration Association.
These activities support the Government’s
declared objective to promote the urban
regeneration of towns and cities.

There are a number of new factors which
are likely to affect the future performance

site assembly. We are finalising proposals
with Fenwick for their new department
store, and with Marks & Spencer and Boots
for their new space requirements. Terms
have been agreed with Canterbury City
Council for our new ground lease. Subject
the development
to completion of
agreement and confirmation of
the
compulsory purchase order, we anticipate
starting on site towards the end of this year.

ft2

the 465,000

We continue to progress our plans at
Exeter, in association with the City Council,
(43,200 m2)
for
Princesshay scheme. Revised proposals
have been submitted which,
following
extensive public consultation, will be
formally determined by the Council this
autumn.

Other projects under consideration include
a major scheme in the centre of Bristol,
where the City Council has appointed us to
undertake a detailed viability study for
a 680,000 ft2 (63,170 m2) retail scheme.
We are also investigating the feasibility of
schemes involving our ownerships in
Reading and East Kilbride.

We continue to focus on working and
refining the portfolio to secure maximum
future growth. At the year end, void
properties available to let, excluding those
being held for development, represented
1.4% of rental value. During the year we
Eccles,
sold
Knightswood and Leith and 51 other retail
properties comprising over 200 shops.
While we will continue to rationalise our
in-town shopping, almost 80% by value is
located in the top 100 towns and cities in
the UK.

shopping

centres

LAND SECURITIES PLC | Operating and Financial Review

Retail Warehouses and Food Superstores

• Current planning policies should enhance future values
• Enlarging and re-configuring parks improves retail mix

and increases value
• 75% by value in parks

The 4.9m ft2 (455,220 m2) portfolio contains over 2.8m ft2 (260,130 m2) with open A1 non-food
or completely open retail consent. Our portfolio mainly consists of parks for which there
continues to be a healthy demand and as a result we have only 27,800 ft2 (2,580 m2) vacant and
available for letting. All our holdings comply with our criteria of main road prominence, easy
access and good car parking provision.

The strong rate of rental growth experienced at the beginning of 1998 was not sustained and this
is reflected in the annual valuation. The recent slowdown in the economy has affected certain
occupiers. However, a number of retailers, particularly in the DIY and electrical sectors, continue to
pursue acquisition programmes, generally with increased store size requirements. Growth will be
stimulated by demand from those high street retailers which are unable to satisfy their requirements
for larger stores in their traditional locations.

Our objective is to enhance the value of our holdings by increasing their size and improving the
retail offer. Full rental value on review can only be unlocked by securing evidence of open market
lettings in the same park or immediate vicinity. We therefore seek to create new letting
opportunities by negotiating the surrender of existing leases, extending or dividing units or by
constructing new units.

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VALUATION AT 31 MARCH 1999

£824.7m

VALUATION %

74.8

PARKS

RENTAL INCOME FOR YEAR ENDED 31 MARCH 1999

VALUATION BY LOCATION

25.2

OTHER

NORTH, N.W.,YORKSHIRE
& HUMBERSIDE
£296.7m | 35.98%

£46.6m

% OF GROUP VALUATION

11.9

RENTAL INCOME %

68.5

PARKS

31.5

OTHER

E. & W. MIDLANDS
& E. ANGLIA
£122.9m | 14.90%

SCOTLAND
& N. IRELAND
£60.2m | 7.30%

GREATER LONDON
& HOME COUNTIES
£273.6m | 33.18%

WALES & SOUTH WEST
£71.3m | 8.64%

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LAND SECURITIES PLC | Operating and Financial Review

Retail Warehouses and Food Superstores continued

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Following the surrender of a large unit at
Bexhill we completed the letting of 30,000 ft2
(2,790 m2) to Currys and PC World.
The park has been enhanced further
by reletting the former Currys store
of 10,000 ft2 (930 m2) to Boots. We
completed the extension and upgrading
of the J Sainsbury foodstore at Wakefield
and are about to start construction on a
15,000 ft2 (1,390 m2) unit at Chadwell
Heath, pre-let to Currys.

We acquired a further 15 acres of land at
Dundee which has the benefit of outline
planning permission for retail use. We plan
to increase our existing park, which will
adjoin a proposed 110,000 ft2 (10,220 m2)

Above
Retail and Leisure Park,
Bexhill

Right
Lakeside Retail Park,
West Thurrock

Tesco store, from 186,800 ft2 (17,350 m2)
to 320,000 ft2 (29,730 m2) to create a new
regional centre.

We have disposed of properties at Beeston,
Bolton, Christchurch, Coventry and
Weston-super-Mare where we believe
growth potential is limited.

for

to purchase

subject to
Terms have been agreed,
planning consent,
land
adjoining our parks at Chesterfield and
Gloucester
the construction of
additional units. At Erdington, Birmingham
we will be carrying out a comprehensive
upgrading to our park of 154,000 ft2
(14,310 m2). We have also secured
subject to completion of a
consent,
planning agreement, to enlarge Lakeside
Retail Park, West Thurrock to 360,000 ft2
(33,450 m2).

out

further

Current Government planning policy
restricting
town
development will reduce future supply
which, together with reviving demand and
our policy of exploiting opportunities to
improve our holdings, should enhance the
value of our existing investments.

Hotels, Leisure and Residential

We continue to progress our leisure
projects and to consider a number of new
town centre schemes.

At Newcastle upon Tyne we have received
planning consent for a 207,000 ft2
(19,230 m2) scheme
include a
multiplex cinema, restaurants,
themed
attractions and related retail. In association
with the City Council, we are proceeding
with a compulsory purchase inquiry to
complete site assembly. We anticipate
starting early next year with completion in
the summer of 2002.

In York, in joint ownership with Evans of
Leeds PLC, we are planning a new leisure
the city walls. The
quarter within
development will
an
regenerate
underutilised area of the city and we are
in
working with
formulating the planning brief for the site.

the City Council

We granted a new 35 year lease on the
London Hilton, Park Lane W1, at an
enhanced rent, to enable the hotelier to
carry out a substantial refurbishment
programme including an extension at first
floor level.

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‘Tiger Tiger’,
Haymarket House SW1

London Hilton
on Park Lane W1

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LAND SECURITIES PLC | Operating and Financial Review

Warehouses and Industrial

• Rents increasing in areas of strong economic activity
• 80% let to warehouse and service sector users
• 73% by value in south east

We are improving the 7.7m ft2 (715,350 m2) portfolio through land acquisition, development and
sales. During the year we completed the construction of 415,300 ft2 (38,580 m2) of warehouse and
industrial accommodation.

At Banbury we developed and let 240,000 ft2 (22,300 m2) in two high bay warehouses. A further
65,000 ft2 (6,040 m2) warehouse was completed in May.This 22.8 acre estate adjacent to Junction 11,
M40 now comprises some 403,900 ft2 (37,520 m2).

At Centurion Park, Tamworth we have built and are marketing a second high bay warehouse of
141,800 ft2 (13,170 m2). This estate comprises 262,900 ft2 (24,420 m2) on 13.2 acres adjacent to
Junction 10, M42.

Our three-unit scheme of 33,500 ft2 (3,110 m2) in Pump Lane, Hayes, Middlesex is complete with
two units let and the remaining 7,450 ft2 (690 m2) agreed to be let subject to concluding
legal documentation.

We took advantage of the stronger investment market in this sector to dispose of a number of secondary
properties totalling 448,000 ft2 (41,620 m2). These were located in the Glasgow suburbs, Weston-
super-Mare, Caldicot, Horwich, Chester and Uxbridge.

VALUATION AT 31 MARCH 1999

£389.4m

RENTAL INCOME FOR YEAR ENDED 31 MARCH 1999

£30.0m

% OF GROUP VALUATION

5.6

VALUATION BY LOCATION

NORTH, N.W., YORKSHIRE
& HUMBERSIDE
£35.6m | 9.14%

E. & W. MIDLANDS
& E. ANGLIA
£55.7m | 14.31%

SCOTLAND
& N. IRELAND
£4.1m | 1.05%

GREATER LONDON
& HOME COUNTIES
£285.6m | 73.34%

WALES & SOUTH WEST
£8.4m | 2.16%

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LAND SECURITIES PLC | Operating and Financial Review

Warehouses and Industrial continued

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Middleton Road, Banbury

Excluding properties under development,
voids represented 3.9% by value at
31 March.

In a joint venture with Gazeley Properties
Limited, we hold options on some 300 acres
at Milton Keynes, adjacent to the M1
motorway, and are in active discussion with
the local authority to develop this land.

We appreciate the need to respond to
customer requirements for shorter leases

and greater flexibility in the provision
of
space. There are some encouraging
indications that rents can be varied to reflect
a range of lease options.

Rental growth in this sector is likely to
remain limited, although we anticipate
increases in areas of strong economic activity
and restricted land supply.

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Operating and Financial Review | LAND SECURITIES PLC

Financial Review

% O F R E N T R O L L S E C U R E D T O 2 5 M A R C H

5
9

2
9

6
8

3
8

9
7

6
7

1
7

7
6

5
6

3
6

0
0
0
2

1
0
0
2

2
0
0
2

3
0
0
2

4
0
0
2

5
0
0
2

6
0
0
2

7
0
0
2

8
0
0
2

9
0
0
2

We reduced the Group’s net irrecoverable
property outgoings by a further £0.6m to
£7.5m which is less than 1.7% of rent roll
net of ground rents. This reflects a level of
voids in the portfolio of 1.6% of rent roll.
The shortfall includes the running costs of
properties that have been emptied pending
redevelopment or refurbishment.

The increase in property management
and administration expenses includes
initial depreciation of the new computer
finance system and the first award under
the Group’s long term incentive plan
which replaced the 1984 Executive Share
Option Scheme.

the

income

Looking forward, rental income of £9.3m
from our recently completed development
programme had been secured but not
received at 31 March 1999. At the same
date, we had secured £26.6m of annual
investment
from
rental
portfolio which is subject to rent-free
periods. However, rental income in the
current year will show the effect of
property sales, less acquisitions, completed
in the year under review of some £6.5m,
new voids in the portfolio and an estimated
loss of £4.3m from properties which will
cease
in
or
anticipation
refurbishment. In addition, at 31 March we
had secured further income of £20.2m
relating
to the current development
programme which had not yet been
received. This income will flow from
developments which are either currently in
progress or very recently completed.

income-producing
redevelopment

to be

Improving rental levels during the year
have resulted in the portfolio, excluding
voids, being 6.0% reversionary, although
there are still some central London offices
which are significantly over-rented. Leases
for the majority of these buildings still have
several years to expiry and almost 63% of
our total rent roll is secured on good
covenants and on long leases without
breaks and with upward only rent reviews
for more than 10 years.

Shops, Shopping Centres

Retail Warehouses and

and Leisure

Food Superstores

Warehouses and

Industrial

1.4
13.0

0.7
14.7

3.9
(3.9)

% of rent roll

Total

1.6
6.0

R E S U LT S
Pre-tax profit increased from £266.0m to
£293.3m. After excluding the results of
property sales, revenue profit for the year
increased by 10.1% to £292.7m. The
increase of £5.3m in pre-tax revenue profit
in the second half of the year, compared
with the first half, was almost entirely due
to higher levels of rental income.

shareholders’

Taking into account the effect of the
annual valuation,
funds
increased by £468.9m, compared with the
previous year, and diluted net assets per
share increased by 7.1% to 975p per share.
After including the interim and proposed
there was a
final gross dividends,
13.5% increase in shareholders’
funds.
The return on equity was 11.2% and the
average return over the last three years has
been 16.9%.

Rental income increased from £438.9m to
£453.6m despite a net loss of income from
the continuing rationalisation of the
portfolio. After adjusting for the effect of
acquisitions and sales during the last two
financial years, rental income on properties
owned throughout the period under
review increased by £21.2m. First lettings
provided an additional £13.3m, mainly
from the recently completed development
programme, and increases from rent
reviews contributed a further £7.6m.

P O R T F O L I O S TAT U S at 31 March 1999

Voids by rental value
Reversionary/(over-rented)

Offices

1.5
(1.9)

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LAND SECURITIES PLC | Operating and Financial Review

Financial Review continued

Revenue profit benefited from a fall in net
interest costs of £14.3m. The major
reduction in interest payable resulted from
conversions of convertible bonds during
the previous accounting period and a
further £83.2m of conversions of 7%
Convertible Stock 2008 during the period
under review. Interest receivable increased
by £4.4m.

The tax charge, equivalent to 26.2% of
revenue profit, reflects the benefit of
capital allowances from developments,
refurbishments and acquisitions. Following
the latest annual property valuation, there
is an estimated potential capital gains tax
liability in the region of £430m.

Adjusted earnings per share increased from
37.07p to 39.11p after taking into account
the increase in share capital
largely
resulting from bond conversions. These
figures have been calculated assuming all
conversions
immediately
took place
interest ceased to accrue on the relevant
convertible stock.

Earnings growth, a positive cash flow and
sizeable cash balance,
together with a
dividend cover of 1.31 times, have enabled
the Directors to propose a final dividend of
21.65p, making an increase of 5.4% for the
year. After all financing costs, dividends
and taxation, the Group produced cash
flow for investment of £73.5m.

Expenditure on properties amounted to
£267.3m, of which £154.3m was incurred

on development and
refurbishment.
£129.5m of this relates to costs associated
with the current development programme.
investment
£106.2m was
acquisitions,
future
development in mind, showing an initial
return of 6.2%.

spent on
many with

Portfolio activity (£m)

Acquisitions/

Sales

Year ended 31 March 1999

developments

proceeds

Retail/Leisure

112.4

113.0

Offices

137.6

2.9

Warehouses and Industrial 17.3
267.3

10.1
126.0

In the same period, net proceeds from
sales of properties amounted to £126.0m.
The properties sold yielded 9.7% after
deducting all our costs. Sales realised a
small surplus, before tax, over book
value and exceeded costs to the Group
by £75.7m.

B A L A N C E S H E E T
Following conversions into equity and
some small repayments, total borrowings
amounted to £1,569.3m at the year end.
Short term investments and cash of
£486.6m was a seasonally high amount
following receipt of March rentals. The
Group also had £250m of committed
bilateral standby facilities available on
competitive terms should further funds be
required. Prior to investment in property,
funds are invested to achieve the best
returns within rigorous controls which are
reviewed regularly by the Board. In all

investment decisions careful consideration
is given to creditworthiness and deposit
limits to minimise exposure to a single
institution. As at 31 March 1999 the Group
had no outstanding interest rate swaps or
other derivatives.

and

At the year end, outstanding expenditure
on the current £1,050m development
programme amounted to some £870m.
Capital creditors at 31 March 1999
amounted
capital
to £65.1m
commitments were £158.6m. In addition,
we have many further potential develop-
ment opportunities which are not yet
sufficiently far advanced to be listed in the
schedule of Group developments on page
11. The most relevant measure of gearing,
interest cover, was some 3.03 times and
balance sheet gearing, taking net debt as a
percentage of net assets, was 19.8% at
31 March 1999. The Group also views its
development programme as a form of
gearing and therefore estimates of balance
sheet gearing should take this into account.

We are confident that we will be able to
capitalise on our balance sheet strength by
developing and acquiring additional
property assets in accordance with our
strategy, but in the event that we cannot
fully use that strength then we will
consider alternative methods of exploiting
our balance sheet strength for the benefit
of shareholders.

Property development and investment is a
long term capital intensive activity and the

Group has sought to minimise the risk of
fluctuations in finance costs as a result of
changes in interest rates by using long term
fixed rate debt to match its property
In common with many
commitments.
investment
mature UK
companies, the current average cost of debt
is high, as the majority of borrowings were
raised during a period of much higher
interest rates and investment returns.

property

During the year, the Financial Reporting
Standard 13, “Derivatives and Other
Financial Instruments”, was introduced
and the additional disclosures required by
the Standard are shown in Note 25 on
pages 60 and 61. The note shows the
market value, defined as the fair value,
the Group’s borrowings including
of
convertible bonds. The fair values as at
31 March 1999 exceeded the book values
of the Group’s borrowings by £723.9m,
in respect of a
reflecting £680.1m
reduction in long term interest rates since
the borrowings were originally taken out
and £43.8m
respect of equity
conversion terms of the convertible bonds.
The adjustment to fair value would reduce
reported diluted net assets per share by
115p and would increase balance sheet
gearing. However, after taking account of
tax relief,
the adjustment to net assets
would be 79p per share.

There is no obligation or present intention
to redeem or retire the borrowings, other
than at maturity when their redemption

from

would be made at par. The only cash
the Group’s
outflows arising
borrowings are the future fixed interest
payments and the redemption at par of
those borrowings that do not convert
into ordinary shares. These outflows are
unaffected by the fair values referred to
above.
the impact of the
exercise of equity conversion terms of
the convertible bonds on the fair values
will not result in any cash outflow by
the Group, as conversion is a non-cash
transaction.

In particular,

Market values are affected by a number
of external factors, including strength of
covenant and, ironically, the stronger the
company, the narrower the trading margin
over the relevant Government gilt and
consequently the higher the market value
of debt. It is also worth noting that the
current strength of our balance sheet
affords us the ability to raise finance for
acquisitions and further developments at
current interest rates.

such

G O I N G C O N C E R N
After reviewing detailed profit projections,
taking into account the available bank
facilities and making
further
enquiries as they consider appropriate, the
Directors are satisfied that the Company
and the Group have adequate resources to
continue in operational existence for the
foreseeable future. For this reason they
continue to adopt the going concern basis
in preparing the financial statements.

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Operating and Financial Review | LAND SECURITIES PLC

AC C O U N T I N G I S S U E S
several new
In addition to FRS 13,
accounting standards and discussion papers
were published during the year. FRS 14
“Earnings per Share” has had no material
effect on the financial statements but its
application has
required mandatory
disclosure of diluted earnings per share.
FRS 15 “Tangible Fixed Assets” was issued
in February but investment properties have
been exempted from its provisions and are
still to be accounted for under Statement
of
Standard Accounting Practice 19
“Accounting for Investment Properties”.
The International Accounting Standards
Committee (IASC) is currently reviewing
accounting for investment properties and is
expected to report later this year. The
implementation of the new financial
reporting standards has had no effect on
the profit or net assets attributable to
shareholders in these financial statements.

harmonising

Discussions
the
accounting for deferred taxation and
pensions continue and the recommended
methods of accounting are expected to be
issued shortly. A discussion paper on a
revised method of accounting for lease
arrangements is also anticipated later
this year.

The issue of recording the fair values of
derivatives and other financial instruments
in financial statements is currently under
active consideration by the IASC. The
inclusion of such information in the

LAND SECURITIES PLC | Operating and Financial Review

Financial Review continued

balance sheet, especially when debt is
intended to be held to maturity, will be
strongly resisted. The proposal, included in
the exposure draft on tangible fixed assets,
for revising FRS 3 “Reporting Financial
Performance” to exclude from the profit
and loss account profits or losses arising
on sales of investment properties, was not
implemented in the published standard.
However, consideration is being given to
the replacement of the profit and loss
account and other primary statements
with a single statement incorporating
all movements in shareholders’
funds.
We favour this approach to accounting
for the results of property investment
companies.

We continue to hold firmly to the view
expressed last year that the UK’s accounting
standards should not be compromised in
circumstances where general business
practice in the United Kingdom would be
adversely affected by the application of an
international accounting standard. We will
continue to uphold this position in our
discussions with the Accounting Standards
Board
interests of our
shareholders and the property industry.

the best

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While property values can benefit from a
favourable movement in valuation yields,
usually resulting from particularly strong
prospects for rental growth or reflecting
favourable returns compared with other
improvements in
forms of investment,
revenue profit depend on sustainable rental
growth. The Group’s balance
sheet
strength, significant cash balances and long
term future growth prospects underpin the
Board’s decision to increase the rate of
dividend for the year. A low inflation
environment should discourage some of
the excesses which have damaged the UK
property industry in the past and led to
significant cyclical
fluctuations. The
prospects of less volatility together with the
Group’s prudent accounting policies
support a lower level of dividend cover
than was maintained in periods of higher
inflation when a cover of about 1.5 times
was considered appropriate.

strategy of

T H E F U T U R E
increasing
The Group’s
shareholder value by development or
refurbishment and by acquiring assets
which can be worked to increase growth
potential requires long term commitment.
As we do not capitalise interest as part of
the cost of development, a substantial
development programme inevitably affects
profits during the expenditure period. We
do, however, reflect the changing value of
our developments in progress by obtaining
annual valuations of all the property assets
in our portfolio.
It is also necessary
continually to review and alter the balance
of the portfolio to anticipate the effects of
changes in technology and demographics.
The pace of rationalisation of the portfolio
through judicious sales has increased in
recent years and we will continue to make
disposals. This process often involves an
initial loss of income as we dispose of
properties which are unlikely to provide
future growth. Although the assets we
acquire,
usually with development
potential, will provide increasing income
and capital growth for shareholders in the
future, there is likely to be a short term
cost. Falling short term interest rates will
also reduce the return from the temporary
deployment of funds prior to investment
in property.

is continuing with

M I L L E N N I U M A N D E U R O I S S U E S
the
The Group
programme of activities mentioned in last
year’s report to achieve compliance with
year 2000 requirements. Its objective is to
ensure that the business of the Group
continues without interruption during the
millennium period. As confirmation of our
commitment, we have signed up to Pledge
2000™ launched by the Department of
Trade and Industry to encourage co-
operation in the resolution of problems
associated with the year 2000.

The Group has established a team to
implement its year 2000 compliance
programme. The team comprises in-house
engineering, computer and management
staff and external consultants to provide
specialist skills where necessary.

Regular reports are made to the Board and
the Computer Steering Committee so that
all senior levels of the Group are kept fully
informed of the scope of the exercise. Our
staff are also briefed on the importance of
giving priority to this issue.

that our

As a result of these initiatives, and
following specific checks and tests, we are
internal computer
satisfied
systems will be year 2000 compliant in
time. As this exercise has been carried out
in conjunction with projects to replace
the mainframe computer with client server
technology and to change the Group’s
property and accounting systems, much

of
the cost of achieving compliance
has been absorbed within these larger
projects and has been capitalised within
fixed assets. Other associated costs have not
been significant.

The review of building services within our
properties is also well advanced. We have
completed surveys and risk assessments
and we expect
to complete mock
millennium testing of systems, where
necessary, this summer. We have advised
our tenants of those properties which are
let on full repairing terms of the potential
problems and requested their confirmation
that measures are being taken to deal with
the matter. We have also contacted our key
suppliers and trading partners to seek
assurances that they will continue to
provide uninterrupted service during the
millennium period and we will monitor
the situation.

We appreciate the importance of the year
2000 problem and consider that we have
taken all reasonable steps to mitigate its
likely effects. Excluding the use of internal
resources, the anticipated revenue cost of
our programme of activities is unlikely to
exceed £100,000.

Despite the Group’s efforts to deal with
the year 2000 issue,
there can be no
assurances that the steps taken will
eliminate all the problems associated with
the year change.We are therefore preparing
contingency plans, which will comprise

Operating and Financial Review | LAND SECURITIES PLC

arrangements required to be in place at
or around the millennium date, to deal
with any problems that may arise from
unexpected events.

The working party appointed to investigate
the likely impact of the euro on our
business continues to monitor the latest
developments. We commissioned a report
on the implementation of the euro within
the business and are ready to take the
appropriate action if the Government
commits the United Kingdom to entry.
We do not intend to expend additional
shareholder funds until a decision is made
and, together with many other businesses,
have pressed the Government to ensure
that
for
time
businesses to amend internal systems prior
to entry to the European Economic and
Monetary Union.

is allowed

sufficient

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LAND SECURITIES PLC

Environment and Health & Safety

E N V I R O N M E N T
Land Securities recognises the importance
of good environmental management and
performance both in terms of protecting
the local and global environment and in
minimising risks to protect the interests of
our investors. The Group fully supports
the Government’s aims for sustainable
development and it continued to advance
its own environmental initiatives during
the past year.

We are committed to an annual review of
our energy and environmental policies.
This year, without significantly altering the
substance of the environmental policy, we
have modified it to allow clear objectives
and targets to emerge more easily. We
have a management structure that supports
the implementation of our policy. Last
summer our new environmental manual
was introduced to all members of staff
through a series of presentations which
stressed the importance which we place
upon this aspect of our business. All staff
have electronic access to this manual.

Training is an important area and we have
held a series of staff seminars to provide
instruction on a range of subjects. We have
also set up an internal environment panel
to interpret the objectives of our policy to
those who have to implement it.

The Group has
joined the Property
and Environment Group. It is encouraging
that the overall performance of the
property
a marked
improvement in 1998 and Land Securities
those organisations
remains amongst
leading the way. We have played a full part

showed

sector

in the review of Part L of the Building
Regulations which the Government has
identified as an important mechanism for
helping to meet its target for reducing the
UK’s level of carbon dioxide emissions.

We set ourselves a target of 20 energy
audits to be carried out over the course
of
the year and completed 22. Several
opportunities have been identified for
reducing energy consumption without
impacting upon performance.

The chilled ceiling system being used in
the developments at 1 and 2 Theobald’s
Court is at the commissioning stage and we
are confident that both properties will
score very well under the Building
Research Establishment Environmental
Assessment
two new
system. The
warehouse units at Slough Retail Park both
achieved “good” ratings.

Comprehensive environmental
impact
assessments are carried out on all of
our proposed major city centre retail
developments.

At the Olympia Centre in East Kilbride
replacing low voltage tungsten lighting
lamps has
with compact fluorescent
enhanced the appearance of the lighting
scheme and greatly reduced running costs.
At our request, a lighting manufacturer
developed new dual technology fittings
to enable the replacement of 700w
exterior
floodlights with multivapour
lamps at the Ards Centre, Newtownards.
This should produce a 75% saving in
energy consumption.

H E A LT H & S A F E T Y
We employ a Health & Safety Officer who
has direct accountability to the Board for
the implementation of our health and
safety policy. Assisted by the appropriate
staff and external consultants, he ensures
that comprehensive risk assessments and
analyses are carried out both at existing
investments
to
developments in order to ensure that safety
standards are maintained.

relation

and

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‘Big Painting Sculpture’ by
Patrick Heron – Stag Place,
Victoria SW1

Corporate Governance

introduction of any significant changes to
employee share or pension schemes. All
Directors have access to the Company
Secretary who is responsible for ensuring
that Board procedures are complied with
and who advises the Board on corporate
governance and compliance matters. The
Board has resolved that directors may seek
independent professional advice at the
Group’s expense in the furtherance of their
duties as directors.

The roles of chairman and chief executive
are split and there exists a strong Non-
executive element on the Board which
currently consists of four Executive and
four Non-executive Directors. The Board
considers that all the Non-executive
Directors should be regarded as being
independent. The senior Non-executive
Director other than the Chairman is John
Hull who is Deputy Chairman. The Board
believes that the present balance and
composition of the Board is appropriate in
the light of prevailing circumstances.

The Board is supplied with comprehensive
management information on a regular and
timely basis, principally by means of a
monthly Board Report and detailed reviews
of rental income and financial projections
every six months. The Group’s cash
management and treasury activities are
reviewed at each Board Meeting.

In view of the size of the Board, it has not
been considered appropriate to establish a
Nomination Committee; instead the entire
Board acts as a Nomination Committee and
is responsible for the selection and

approval of candidates for appointment to
the Board.

In accordance with the Companies Acts and
the Articles of Association of the Company,
all Directors are required to submit
themselves to shareholders for re-election
to the Board at the first Annual General
Meeting following their appointment and
at regular intervals thereafter. A resolution
will be proposed at the 1999 Annual
General Meeting to amend the Company’s
Articles of Association so that in future
every Director is required to stand for re-
election every three years (under the
Articles of Association as currently worded,
there may in certain circumstances be a
four-year interval between the re-election
of Directors and the Company did not
comply with this provision of the Code in
the year under review). Non-executive
Directors are appointed for an initial period
of three years which is extendable upon
mutual agreement.
John Hull, who is
Deputy Chairman, has served as a Director
since 1976; he will retire from the Board
on 14 July 1999.

Directors are provided with training and
induction into the responsibilities of a
immediately
to,
director prior
following, their appointment to the Board,
if that appointment is the first occasion that
they have been appointed to the Board of a
listed company. The training needs of
Directors are reviewed periodically to
ensure that they are kept up to date on
relevant new legislation and changing
commercial risks.

LAND SECURITIES PLC

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T H E C O M B I N E D C O D E – P R I N C I P L E S O F

G O O D G OV E R N A N C E A N D C O D E O F B E S T

P R AC T I C E ( D E R I V E D F R O M T H E C A D B U RY,

G R E E N B U RY A N D H A M P E L C O M M I T T E E

contained

R E P O R T S ) .
As required by the Combined Code, the
Board is reporting on how it applies the
principles
the Code.
Throughout the year ended 31 March
1999, the Company has generally been
in compliance with the provisions of
the Code. Areas where the Company has
not complied fully with the Code are
detailed in the following review. While
strongly endorsing the importance of
accountability, the Board supports the view
expressed in the final report issued by the
Hampel Committee that “the board’s first
responsibility is to enhance the prosperity
of the business over time”.
It is your
Board’s responsibility to ensure good
governance but this process cannot be an
end in itself.

and

operating

It operates

D I R E C T O R S
The Board normally meets at least eight
Its principal task is to
times a year.
formulate strategy and to monitor and
control
financial
performance in pursuit of the Group’s
in
strategic objectives.
accordance with a formal schedule of
to
matters
for
decision.
include
These matters
property developments, refurbishments,
acquisitions and disposals in excess of
£30 million, fund raising, loan repayments
and treasury policy. They also include the
appointment or removal of Directors and
the
the Company

the Board

Secretary

reserved

and

LAND SECURITIES PLC

Corporate Governance continued

D I R E C T O R S ’ R E M U N E R AT I O N
Details of the Company’s Remuneration
Committee and Directors’ remuneration
are contained in the Report on page 35.

imposed

to ensure

R E L AT I O N S W I T H S H A R E H O L D E R S
The Company values dialogue with
institutional and private shareholders, and
the Chief Executive together with the
Finance Director hold regular meetings
with institutional shareholders to discuss
strategic and other issues within the
constraints
the
protection of price sensitive information
which has not already been made available
generally to the Company’s shareholders.
The Board welcomes moves towards
a more constructive use of Annual
General Meetings and regards the Annual
General Meeting
principal
opportunity to meet private shareholders.
In future, details of proxy voting will be
disclosed on each resolution after it
has been dealt with by a show of hands;
the Company did not comply with this
provision of the Code in respect of the
1998 Annual General Meeting.

the

The Chairmen of the Audit and Remuner-
ation Committees normally attend each
Annual General Meeting in order to answer
any questions relating to the activities of
these Committees.

The Company supports the concept of
individual resolutions on each substantially
separate issue at General Meetings and will
continue to propose a separate resolution
relating to the Report and Financial
Statements.

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With effect from the 1999 Annual General
Meeting, the Company is arranging for
the Report and Financial Statements and
related papers to be posted to shareholders
so as to allow at least 20 working days
for consideration prior to the Annual
General Meeting.

AC C O U N TA B I L I T Y A N D AU D I T
Financial Reporting
The Board seeks to present a balanced
and understandable assessment of the
Company’s position and prospects, and
details are given in the Chairman’s Statement
and the Operating and Financial Review.

Internal Control
Pending the production of guidance by the
Institute of Chartered Accountants in England
and Wales on the scope, extent, nature and
review of internal controls to which the Code
refers, the Board is, as recommended by the
London Stock Exchange, reporting on the
Group’s internal financial controls pursuant
to the guidance for directors on internal
controls and financial reporting issued in
December 1994.

Internal financial controls are the pro-
cedures established to provide reasonable
assurance of:
(a) the safeguarding of assets against
unauthorised use or disposition; and
(b) the maintenance of proper accounting
records and the reliability of financial
information used within the business
or for publication.

The Directors are responsible for the
system of internal financial control which
is designed to provide reasonable but not
absolute
against material
assurance
misstatement or loss.

reviewed

The Directors have
the
effectiveness of the system of internal
financial control, the key procedures of
which are:
(a) clearly defined organisational responsi-

bilities and limits of authority.

(b) annual and long term revenue, cash
flow and capital forecasts, updated
regularly during the year; monthly
monitoring of cash flow and capital
expenditure and monthly reporting of
key financial information to the Board;
quarterly and half yearly revenue
comparisons with forecasts.

(c) financial controls and procedures,
including information systems, detailed
in policies and procedures manuals.
(d) clearly defined guidelines for capital
expenditure and disposals, including
detailed appraisal procedures, defined
levels of authority and monthly
reporting on all capital projects.

(e) an internal audit function which
reviews business processes and controls
and reports directly to the Board.
(f ) an Audit Committee which approves
audit plans and published financial
information and
reports
from internal and external auditors,
dealing with any significant control
matters raised.

reviews

Report of the Remuneration Committee

LAND SECURITIES PLC

Corporate Governance continued

AU D I T C O M M I T T E E
The Audit Committee consists solely of the
Non-executive Directors and is chaired by
Peter Hardy.

At its regular meetings the Committee
seeks to ensure that appropriate accounting
systems and financial controls are in
operation and that the Group’s financial
statements comply with statutory and other
requirements. The Committee receives
reports from and consults with the internal
and external auditors.
It reviews the
interim and annual results and considers
any matters raised by the internal and
external auditors.
It also monitors the
scope, cost effectiveness, independence and
objectivity of the external audit. The terms
of reference of the Committee were
reviewed and updated by the Board during
the year under review.

VALUAT I O N S
The Group has for many years given the
valuers and auditors access to each other.
These advisers have a dialogue and
exchange of information which is entirely
independent of the Group.

N O N - E X E C U T I V E D I R E C T O R S
Remuneration for the Chairman and Non-
executive Directors is determined by the
Board within the levels set in the Articles of
Association. They do not participate in any
of the Company’s share incentive, bonus or
pension schemes. The Chairman and Non-
executive Directors are currently appointed
for an initial period of three years subject
to renewal for further periods and to the
rotation provisions under the Articles of
Association. They do not have service
agreements with the Company.

complies with

D I R E C T O R S ’ R E M U N E R AT I O N
the
The Company
requirements of the Combined Code in
relation to directors’ remuneration. The
Board has established a Remuneration
Committee which operates within agreed
terms of reference and which makes
recommendations to the Board on the
Company’s framework and cost of executive
remuneration. No Director is involved in
deciding his own remuneration.

1 . C O M P O S I T I O N O F T H E C O M M I T T E E
The Committee consists solely of the
Non-executive Directors and is chaired by
John Hull.

2 . F U N C T I O N O F T H E C O M M I T T E E
The function of the Committee is to review
and determine annually within the context
of the Board’s remuneration policy the
individual salaries and other terms and
conditions of employment of the Executive
Directors, together with any incentive or
bonus scheme in which the Executive
Directors and other senior executives may
be invited to participate.The Committee also
reviews the Chief Executive’s remuneration
proposals for the Group’s staff other than
the Executive Directors. The Committee
consults the Chief Executive in relation to
proposals for the remuneration of the other
Executive Directors and the Committee has
access to professional advice where this is
considered appropriate.

3 . R E M U N E R AT I O N P O L I C Y
The objective of the Group’s remuneration
policy is to provide remuneration in a form
and amount to attract, retain and motivate
high quality management. The levels

remuneration are set

of
to ensure
comparability across a broad spectrum of
UK based companies of similar size from
all sectors but with particular emphasis on
the property industry.

aligning

importance

In deciding on the appropriate level of
remuneration,
the Board is mindful of
the long term nature of the business and
the
any
performance awards with returns to
shareholders. It attempts to achieve this
balance through a base annual salary and
cash bonuses which are geared to the
achievement of short term objectives while
providing an incentive to achieve longer
term success through the Group’s Long
Term Incentive Plan.

reflects his

Each Executive Director receives a salary
which
responsibilities,
experience and performance. Salary is
reviewed annually and the review process
includes using comparator information
and reports from specialist consultants.
However, the Committee is mindful of the
need to treat such comparisons with
caution so that they do not result in an
upward ratchet of remuneration levels with
no
in
performance and also takes account of pay
and employment conditions elsewhere in
the Group, especially when determining
annual salary increases. The performance
related elements of directors’ remuneration
are designed to form an important part of
their total remuneration package, to align
their interests with those of shareholders
and to give directors incentives to perform.

corresponding

improvement

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LAND SECURITIES PLC

Report of the Remuneration Committee continued

Details of each Director’s emoluments and
share options are shown in Note 7 on
pages 51 and 52.

4 . R E M U N E R AT I O N O F N O N - E X E C U T I V E

regard

D I R E C T O R S
The annual remuneration of the Chairman
of the Board, Peter Birch, is determined by
the Committee having
to
independent advice. The other Non-
executive Directors each receive a fee
agreed by the Board following a review of
fees paid by comparable organisations.
Neither the Chairman nor the other Non-
executive Directors receive any pension
benefits from the Company, nor do they
participate in any bonus or incentive
schemes. All Non-executive Directors are
appointed on the basis of serving for an
initial three-year period, which can be
renewed. All are subject to retirement by
rotation in accordance with the Articles of
Association of the Company.

5 . E M O LU M E N T S A N D S H A R E O P T I O N S
Executive Directors’ emoluments consist of
salary, car benefit, pension contribution,
medical and life insurance, together with
participation in savings related share
option, profit sharing and profit related pay
schemes which are also open to property
management and administration staff.

Executive Directors also participate in an
annual bonus scheme which is open to
selected senior executives in the Group.
This
scheme measures performance
against a series of targets based on
criteria established by the Committee.
The potential maximum payment under

this scheme is currently 20% of salary.
The key criteria are reviewed annually to
ensure that targets are set in line with
prevailing business circumstances. Current
criteria cover such areas of the business
the development
as
programme, rent reviews and renewals and
levels of voids, property outgoings
shortfalls and bad debts.

progress with

Following the decision by the Government
to phase out the tax concessions associated
with profit related pay,
the Group has
decided to replace the current scheme,
which is open to all property management
and administration staff, with a scheme
which more closely associates individual
reward with the performance of the Group.
This new bonus scheme will use annually
adjusted earnings per share data as its key
measure of performance and will result in
payments of between 2% and 10% of salary
each year. The current Profit Related Pay
Scheme has paid out approximately 4% of
salary and has also enjoyed the tax
advantages associated with such schemes.
Following the introduction of this new
scheme, the maximum payment under the
existing Annual Bonus Scheme, open to
senior executives, will be limited to 10%,
so that the maximum benefit from both
annual bonus schemes in one year will not
exceed 20% of salary.

The 1984 Executive Share Option Scheme
expired in April 1995. As a result, no
options have been granted since July 1994.
A long term incentive plan was introduced
to replace the 1984 Executive Share Option
Scheme and awards under the Plan depend

on the Group’s total shareholder return
five-year
achieved over a series of
performance periods as compared with the
total shareholder returns achieved by a
selected peer group of companies carrying
on comparable businesses. No award will
be paid in respect of any particular period
unless the Group is ranked in the first four
of the eight companies in the peer group
in that period. Awards for ranking positions
in the first four of the group range from
25% for fourth position to a maximum of
55% of salary for first position. Half of any
award will be payable in cash and half in
shares, such shares to be released to the
beneficiary on the second anniversary of
the award.

Current participants under the Plan are the
Executive Directors, Company Secretary
and the Directors and Assistant Directors of
the Group’s operating company. Selection
of participants is at the discretion of the
Remuneration Committee. The Plan
includes transitional provisions to reflect
the Committee’s original intention that the
Plan would be effective from 1 April 1996
with performance measured by three
rather than five-year periods. There are
therefore three transitional performance
periods, each commencing on 1 April
1996 and ending respectively on 31 March
1999, 2000 and 2001. Following the
expiry of the first transitional period, the
Group achieved a ranking of third position
within the peer group, which gave rise to
an award of 35% of salary, half of which is
payable in cash, with the balance being due
in shares.

LAND SECURITIES PLC

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to length of service, with a pension of up
to two-thirds of final salary, subject to
Inland Revenue limits and other statutory
rules. The Scheme also provides lump sum
death-in-service benefits of four times
pensionable salary and pension provision
for dependants of members. Only basic
salary is treated as pensionable pay. With
effect from 1 January 1999 this scheme
was closed to new entrants and replaced by
a contributory Money Purchase Scheme.

7 . S E R V I C E A G R E E M E N T S
The Executive Directors accepted a
reduction of the notice period in their
service agreements from two years to one
year, which took effect from 1 April 1998.
The Chairman and the other Non-executive
Directors do not have service contracts
with the Company.

J O H N H U L L , C h a i r m a n o f t h e C o m m i t t e e

f o r a n d o n b e h a l f o f t h e B o a r d

The following table shows the Executive
Directors’ accrued pension entitlements as
at 31 March 1999, which are based upon a
normal retirement age of 60. The increase
in accrued pensions during the year
reflects the change in retirement age from
62 to 60 which took effect from 1 April
1998 but excludes any increase for
inflation. The transfer values have been
calculated on the basis of actuarial advice in
accordance with Actuarial Guidance Note
GN11. These values represent a liability
on the Group’s pension scheme and
not a sum payable to the individual
Directors. Therefore transfer values cannot
meaningfully be
annual
remuneration.

added

AC C R U E D P E N S I O N S year ended 31 March 1999

Accrued at

Increase Transfer value

31 March 1999

during year

of increase

I J Henderson

M R Griffiths

K Redshaw

J I K Murray

173,506

110,820

110,215

118,685

52,717 1,075,500

15,357

400,400

14,253

385,600

16,879

415,800

following

The cash payments in respect of the three-
year period to 31 March 1999 will be as
follows:
I J Henderson £58,625, M R Griffiths
£39,375, K Redshaw £39,375, and J I K
Murray £41,125. Each Executive Director
will also be awarded conditional rights to
receive Ordinary Shares in the Company
having an average market value for the
seven dealing days
the
announcement of the Company’s results
equivalent to the cash bonus shown above.
The Executive Directors will normally
become
those
shares only after remaining employed for a
further two years. If a Director leaves the
Company during that two-year period
(except in the case of normal retirement,
disability or death), his conditional
entitlement to those shares will
lapse,
subject to the overriding discretion of the
Remuneration Committee.

entitled

receive

interests of

The
the four Executive
Directors at 31 March 1999 under the Plan
could amount to a maximum of 55% of
their basic salaries for the four outstanding
performance periods if a ranking position
of first is achieved for each period.The Plan
will terminate in June 2006, 10 years after
the date of its adoption by shareholders.

6 . P E N S I O N S
The Executive Directors participate in a
non-contributory defined benefit pension
scheme which was open to property
management and administration staff until
31 December 1998. This scheme provides
them, at normal retirement age and subject

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LAND SECURITIES PLC

Directors’ Report

for the year ended 31 March 1999

The Directors submit their Report with
the financial statements for the year to
31 March 1999. A review of the Group’s
business and results for the year is
contained in the Chairman’s Statement
and the Operating and Financial Review,
which should be read in conjunction with
this Report.

1 B U S I N E S S O F T H E G R O U P
During the year the Group has continued
its business of property investment and
retail
development of offices,
warehouses,
leisure,
warehouse
industrial premises
throughout the United Kingdom, together
with the management of its properties.

food superstores,
and

shops,

2 R E S U LT S F O R T H E Y E A R A N D D I V I D E N D S
The results are set out in the Consolidated
Profit and Loss Account on page 44.

An interim dividend of 7.85p per share
was paid on 4 January 1999 and the
Directors now recommend the payment of
a final dividend of 21.65p per share
making a total of 29.50p per share for the
year ended 31 March 1999, an increase of
5.4% over that for the previous year.

Subject to authorisation at the Annual
General Meeting to be held on 14 July
1999, the final dividend will be paid on
26 July 1999 to shareholders registered on
11 June 1999. The shares are expected to
be quoted ex-dividend from 7 June 1999.

3 VALUAT I O N A N D N E T A S S E T S
(i) Valuation
In accordance with their report reproduced
on page 43, Knight Frank valued the
Group’s properties at £6,910.5m as at
31 March 1999. This is an increase of
£474.8m over that at the previous year
end. After taking into account total

expenditure on properties of £267.3m and
the aggregate book value of properties sold
during the year of £125.4m, the surplus on
valuation was £332.9m.

(ii) Net Assets
valuation has been
The portfolio
included in the financial statements for the
year ended 31 March 1999 and the net
assets of the Group at that date amounted
to £5,470.4m. Without adjusting for any
taxation which would become payable in
the event of properties being sold, the net
assets attributable to each share in issue on
that date were 987p. Taking into account
shares reserved for issue under the terms
the Group’s convertible bonds and
of
employee share schemes, the diluted net
asset value per share was 975p.

The amount of tax on capital gains, which
would become payable in the event of
sales of the properties at the amounts at
which they are included in the financial
statements, is given in Note 8 on page 53.
in the region of £430m
The amount,
(1998 £350m), represents approximately
6.2% of the aggregate valuation.

4 D I R E C T O R S
The Directors who held office during the
year were:
*P G Birch CBE FCIB
*John Hull CBE
I J Henderson BSc FRICS
*H I Connick LLB
(retired 1 July 1998)
M R Griffiths FRICS
K Redshaw BSc FRICS
J I K Murray MA FCA
*P B Hardy
*Sir Alistair Grant DL FRSE
*Non-executive and member of the Remuneration and
Audit Committees.

Biographical details of the Directors appear on
page 40.

John Hull will retire from the Board on
14 July 1999 and does not wish to offer
himself for re-election.

and P B Hardy

I J Henderson
retire
from the Board by rotation and, being
eligible, offer themselves for re-election.
I J Henderson has a service agreement
with the Company with a notice period of
one year. P B Hardy does not have a service
agreement with the Company.

Particulars of the interests of each Director
in the shares and debentures of the
Company, as shown by the Register of
Directors’ Share and Debenture Interests,
and of their holdings of options over
Ordinary Shares, are set out in Note 7 on
pages 52 and 53.

Apart from share options, no contract
subsisted during or at the end of the
financial year in which a Director of the
Company is or was materially interested
and which is or was significant in relation
to the Group’s business.

5 S H A R E C A P I TA L
The Company was authorised at the Annual
General Meeting held in 1998 to purchase
in the market Ordinary Shares representing
up to approximately 9.25% of the issued
share capital at that time.This authority has
the
not been used and expires at
conclusion of the 1999 Annual General
Meeting. A resolution will be proposed as a
special resolution at the 1999 Annual
General Meeting to renew the authority
until the conclusion of the Annual General
Meeting in 2000.

LAND SECURITIES PLC

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The Group has recently revised its Business
Ethics Policy and copies have been
circulated to all staff who are required to
abide by its provisions.

8 D O N AT I O N S
During the year ended 31 March 1999 the
Group made no contributions of a political
nature. Charitable donations amounted
to £135,000.

1 1 A N N UA L G E N E R A L M E E T I N G
Accompanying this Report is the Notice of
the Annual General Meeting which sets out
the usual resolutions for the meeting and
the special business resolutions. These are
explained in a letter from the Chairman
which accompanies the Notice. The special
business resolutions are:

To amend the Savings-Related Share Option
Scheme.

9 E N V I R O N M E N T
The Group’s environmental policy is
outlined on page 32.

To adopt a new Profit Sharing Scheme to
replace the 1989 scheme which has
expired.

1 0 PAY M E N T P O L I C Y
The Group is a registered supporter of the
CBI’s Better Payment Practice Code to
which it subscribes when dealing with all
of its suppliers.

that payments are made

The Code requires a clear and consistent
policy
in
accordance with contract or as required by
law; that payment terms are agreed at the
outset of a transaction and adhered to; that
no amendments to payment terms are
made without the prior agreement of
suppliers and that there is a system which
deals quickly with complaints and disputes
to ensure that suppliers are advised
accordingly without delay when invoices
or parts thereof are contested. Copies of the
Code are available on application to the
Company Secretary.

To increase the annual limit on fees payable
to Directors of the Company.

To amend the Articles of Association.

To renew the Directors’ authority for the
Company to purchase its own shares.

forming a new

1 2 AU D I T O R S
During the year the auditors, Price
Waterhouse, merged with Coopers
and Lybrand
firm
PricewaterhouseCoopers. As a consequence
of this merger Price Waterhouse resigned
as
July 1998 and
PricewaterhouseCoopers were appointed
in their place. PricewaterhouseCoopers
have expressed
to
continue in office and a resolution will be
proposed for their reappointment at the
Annual General Meeting.

their willingness

auditors on 20

The effect of the Group’s payment policy is
that its trade creditors at the financial year
end represented 14.8 days’ purchases.

By order of the Board
P M D U D G E O N , S e c r e t a r y
26 May 1999.

6 S U B S TA N T I A L S H A R E H O L D E R S
At 13 May 1999 the following interests in
issued share capital had been notified to
the Company under Part VI of the
Companies Act 1985.

Merrill Lynch and Co, Inc
Prudential Corporation plc

56,354,503
34,193,513

10.2
6.2

7 S TA F F
The Group operates profit sharing and
savings related share option schemes and
administers the executive share option
scheme
the options
respect of
outstanding. Under the 1989 profit sharing
scheme an aggregate of 886,596 Ordinary
Shares has been appropriated for the
benefit of employees up to 31 March 1999.
Details of the savings related and executive
share option schemes are shown in Note 6
on page 51. The executive share option
scheme expired on 24 April 1995. The
Group also operates a profit related pay
scheme
for all administration staff.
Through these schemes a widespread
interest in the Group’s future is assured and
all staff are kept informed of the Group’s
progress. The Board welcomes
the
significant involvement in the Group’s
future which these schemes encourage.

The Group continues to operate its health
and safety policy in accordance with all
relevant legislation and gives full and fair
consideration to applications by disabled
persons for employment.

In all employment matters the Group
maintains its commitment to an equal
opportunities policy.

Communication with staff is achieved in
a number of ways, which include an
in-house staff newsletter.

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LAND SECURITIES PLC

Directors and Advisers

31 March 1999

L A N D S E C U R I T I E S P L C

B OA R D O F D I R E C T O R S

Peter G Birch 61

Keith Redshaw 53

Joined the Group in 1970. Appointed
a Director of Land Securities Properties
Limited in 1986 and to the Board in 1990.
Past President of the British Council of
Shopping Centres and Member of
The Oxford Retail Group. Responsible
for the retail portfolio and management
of the Group’s properties outside
central London.

James I K Murray 52

Joined the Group in 1981 and appointed
a Director of Land Securities Properties
Limited in 1986. Appointed to the Board
in 1990, Finance Director in 1991.
Member of the Technical Committee of
The Hundred Group.

Peter B Hardy 60

Appointed to the Board in 1992. Managing
Director, Investment Banking with SG
Warburg Group plc until 1992. Director of
Kingfisher plc, Foreign and Colonial PEP
Investment Trust plc, Fairview Holdings plc,
Howard de Walden Estates Limited and
Barnardos.

Sir Alistair Grant 62
Chairman of Safeway plc until March 1997.
Chairman of Scottish and Newcastle plc and
Governor of the Bank of Scotland.

Appointed a Director in 1997 and Chairman
in July 1998. Chief Executive of Abbey
National plc until March 1998. Chairman
of Trinity plc. Director of N M Rothschild
& Sons Limited, Coca-Cola Beverages plc,
Dah Sing Financial Holdings Limited and
Travelex Exchange Corporation Ltd.

John Hull 73

Appointed a Director and Deputy Chairman
in 1976, Chairman from December 1997
to July 1998. A Director of Legal and
General Group plc until 1990 and Chairman
of J Henry Schroder Wagg & Co Limited
1977-83. Deputy Chairman of the Panel of
Takeovers and Mergers.

Ian J Henderson 55

Joined the Group in 1971. Appointed a
Director of Land Securities Properties
Limited in 1979 and Managing Director in
1990. Joined the Board in 1987, appointed
Deputy Managing Director in 1996 and
Chief Executive in December 1997.
Vice-chairman of the Board of Management
of Central and Cecil Housing Trust and
past Chairman of Westminster Property
Owners Association.

Michael R Griffiths 54

Joined the Group in 1973. Appointed
a Director of Land Securities Properties
Limited in 1986 and to the Board in 1990.
Vice-president of City Property Association.
Responsible for the central London portfolio
and the Group’s project management.

S O L I C I T O R S
Nabarro Nathanson
50 Stratton Street
London W1X 6NX

AU D I T O R S
PricewaterhouseCoopers
Southwark Towers
32 London Bridge Street
London SE1 9SY

VALU E R S
Knight Frank
20 Hanover Square
London W1R 0AH

B A N K E R S
Lloyds TSB Bank Plc
72 Lombard Street
London EC3P 3BT

J Henry Schroder
& Co Limited
120 Cheapside
London EC2V 6DS

R E G I S T R A R
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex BN99 6DA

S T O C K B R O K E R S
Warburg Dillon Read
1 Finsbury Avenue
London EC2M 2PP

Cazenove & Co
12 Tokenhouse Yard
London EC2R 7AN

LAND SECURITIES PLC

Senior Management

31 March 1999

P R I N C I PA L P R O P E R T Y O W N I N G C O M PA N I E S

R AV E N S E F T P R O P E R T I E S

L I M I T E D

DIRECTORS
I J Henderson BSc FRICS
Chairman

K Redshaw BSc FRICS
Managing Director

M R Griffiths FRICS
J I K Murray MA FCA
R H DeBarr FRICS
N W Johnson FRICS
A R Strange FRICS
†P G Cottingham BSc ARICS
†J C Grimes BSc ARICS
†G A Jones BSc FIPD
†C J Oppé BA
†T A Seddon BSc ARICS

T H E C I T Y O F LO N D O N R E A L

P R O P E R T Y C O M PA N Y L I M I T E D

DIRECTORS
I J Henderson BSc FRICS
Chairman

M R Griffiths FRICS
Managing Director

J I K Murray MA FCA
M A Bird FRICS
N W Johnson FRICS
†P J Harwood
†N Pennell BTech CEng MCIBSE
†A G Williams ACII

R AV E N S I D E I N V E S T M E N T S

R AV E N S E F T I N D U S T R I A L

L I M I T E D

DIRECTORS
I J Henderson BSc FRICS
Chairman

J Maynard
Managing Director

M R Griffiths FRICS
K Redshaw BSc FRICS
R D S Nevett FRICS
R N Hodder ARICS
†K B Venables

E S TAT E S L I M I T E D

DIRECTORS
I J Henderson BSc FRICS
Chairman

J Maynard
Managing Director

M R Griffiths FRICS
K Redshaw BSc FRICS
R D S Nevett FRICS
†D P Wynne BSc ARICS

G R O U P O P E R AT I O N S

L A N D S E C U R I T I E S

P R O P E R T I E S L I M I T E D

DIRECTORS
I J Henderson BSc FRICS
Chairman and Managing Director

M R Griffiths FRICS
K Redshaw BSc FRICS
J I K Murray MA FCA
J Maynard
N W Johnson FRICS
A R Strange FRICS
N A C Moore FCA
M A Bird FRICS
R H DeBarr FRICS
R W Heskett BSc FRICS

ASSISTANT DIRECTORS
R D S Nevett FRICS
A M C Dobbin TD MA FCA
G Field MSc FRICS
S M A Shah BSc FCA
P J Cleary BSc ARICS
P H Frackiewicz BSc FRICS
M J McGuinness BSc ARICS
*D M Rippon BSc PhD
†R J Akers MA ARICS

SECRETARY
P M Dudgeon LLB FCIS

*appointed 1 October 1998
†appointed 1 April 1999

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LAND SECURITIES PLC

Directors’ Responsibilities & Auditors’ Report

with sufficient evidence to give reasonable
assurance that the financial statements are free
from material misstatement, whether caused by
fraud or other irregularity or error. In forming our
opinion we also evaluated the overall adequacy of
the presentation of information in the financial
statements.

O P I N I O N
In our opinion the financial statements give a true
and fair view of the state of affairs of the Company
and the Group at 31 March 1999 and of the profit
and cash flows of the Group for the year then
ended and have been properly prepared in
accordance with the Companies Act 1985.

PricewaterhouseCoopers
Chartered Accountants and Registered Auditors
London
26 May 1999.

D I R E C T O R S ’ R E S P O N S I B I L I T I E S
The Directors are required by company law to
prepare financial statements for each financial year
which give a true and fair view of the state of affairs
of the Company and of the Group as at the end of
the financial year and of their profit or loss for that
period and comply with the Companies Act 1985.

The Directors are responsible for ensuring that
applicable accounting standards have been followed
and that suitable accounting policies, consistently
applied and supported by reasonable and prudent
judgements and estimates, have been used in the
preparation of the financial statements.

It is also the responsibility of the Directors to
prepare the financial statements on the going
concern basis unless it is inappropriate to presume
that the Company and the Group will continue in
business.

The Directors are also responsible for maintaining
proper accounting records so as to enable them to
comply with company law. The Directors have
general responsibilities for safeguarding the assets
of the Company and of the Group and for taking
reasonable steps for the prevention and detection of
fraud and other irregularities.

R E P O R T O F T H E A U D I T O R S T O T H E
M E M B E R S O F L A N D S E C U R I T I E S P L C
We have audited the financial statements on pages
44 to 61.

Respective Responsibilities of Directors
and Auditors
The Directors are responsible for preparing the
Annual Report including, as described on this page,
the financial statements. Our responsibilities, as
independent auditors, are established by statute, the
Auditing Practices Board, the Listing Rules of the
London Stock Exchange and our profession’s
ethical guidance.

We report to you our opinion as to whether
the financial statements give a true and fair view
and are properly prepared in accordance with
the Companies Act. We also report to you if, in
is not
our opinion,
the Directors’ Report
consistent with the financial statements,
if the
Company has not kept proper accounting records,
if we have not received all the information and
explanations we require for our audit, or if
information specified by law or the Listing Rules
regarding directors’ remuneration and transactions
is not disclosed.

We read the other information contained in the
Annual Report and consider the implications for
our report if we become aware of any apparent
misstatements or material inconsistencies with the
financial statements.

We review whether the statement on page 33
reflects the Company’s compliance with those
provisions of the Combined Code specified for our
review by the London Stock Exchange, and we
report if it does not.We are not required to form an
opinion on the effectiveness of the Company or
Group’s corporate governance procedures or its
internal controls.

B A S I S O F AU D I T O P I N I O N
We conducted our audit in accordance with
Auditing Standards issued by the Auditing Practices
Board. An audit includes examination, on a test
basis, of evidence relevant to the amounts and
It also
disclosures in the financial statements.
includes an assessment of the significant estimates
and judgements made by the Directors in the
preparation of the financial statements, and of
whether the accounting policies are appropriate to
the Company’s circumstances, consistently applied
and adequately disclosed.

We planned and performed our audit so as to
obtain all the information and explanations which
we considered necessary in order to provide us

No allowance has been made for expenses of
realisation or for any taxation which might arise
and our valuations are expressed exclusive of any
Value Added Tax that may become chargeable. As in
previous years, investment properties held for, or in
the course of, development are included at Open
Market Value.

Our valuations assume that the properties have
good and marketable titles and are free of any
undisclosed onerous burdens, outgoings or
restrictions. We have not seen planning consents
and, except where advised to the contrary, have
assumed that the properties have been erected and
are being occupied and used in accordance with all
requisite consents and that there are no outstanding
statutory notices.

We have not read documents of title or leases and,
for the purpose of our valuations, have accepted the
details of tenure, tenancies and all other relevant
information with which we have been supplied by
your Company. When considering the covenant
strength of individual tenants we have not carried
out credit enquiries but have reflected in our
valuations our general understanding of
purchasers’ likely perceptions of tenants’ financial
status. We have, in addition, discussed with the
Company any bad debts or material arrears of rent
such as might reflect on covenant.

We were not instructed to carry out structural
surveys of the properties, nor to test the services,
but have reflected in our valuations, where
necessary, any defects,
items of disrepair or
outstanding works of alteration or improvement
which we noticed during the course of our
inspections or of which you have advised us. Our
valuations assume the buildings contain no
deleterious materials and that the sites are
unaffected by adverse soil conditions except where
we have been notified to the contrary.

For the purposes of this valuation we have assumed
that, where appropriate, suitable action has been
taken to ensure year 2000 compliance in respect of
the properties and their services. The Company has
informed us that its objective is to meet the
Definition of Year 2000 Conformity Requirements
issued by the British Standards Institution.

Valuers’ Report

We have not carried out any scientific investigations
of the sites or any of the properties to establish the
existence or otherwise of any environmental
contamination. The Company has established
procedures for identifying and investigating
environmental matters and we have been provided
with reports for certain properties which we have
discussed with the Company. The environmental
reviews which have been carried out by or on
behalf of the Company have not, we understand,
led the Directors to believe that there are any
significant potential environmental problems
within the Group’s portfolio. In accordance with
our enquiries of the Company, and the contents of
the above mentioned reports, we have assumed that
the land and buildings,
the subject of our
valuations, do not suffer from any significant
environmental problems.

Having regard to the foregoing we are of the
opinion that the values as at 31 March 1999
totalled £6,910,477,500, (SIX THOUSAND NINE
HUNDRED AND TEN MILLION FOUR HUNDRED
AND
SEVEN THOUSAND FIVE
HUNDRED POUNDS).

SEVENTY

We understand that the tables which accompany
this valuation giving a breakdown of the portfolio
by tenure, property types and regional distribution
are to be reproduced elsewhere in the Company’s
Report and Financial Statements as will a listing of
the majority of properties by value.

Our valuation is for the use only of the party to
whom it is addressed and no responsibility is
accepted to any third party for the whole or any
part of its contents. If our opinion of value is
disclosed to persons other than the addressees of
this report, the basis of valuation should be stated.
If it is proposed to publish the figure, the form and
context in which the figure is to appear should be
approved by us beforehand.

Yours faithfully,

K N I G H T F R A N K
20 Hanover Square,
London W1R 0AH
29 April 1999.

LAND SECURITIES PLC

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The Directors

L A N D S E C U R I T I E S P L C
5 Strand, London WC2N 5AF.

Dear Sirs,
In accordance with your instructions to prepare a
valuation for balance sheet purposes we have
inspected the properties, made all relevant
enquiries, and obtained such further information
as necessary to provide you with our opinion of the
current Open Market Values of all the freehold and
leasehold properties owned by your Company
and its subsidiaries as at 31 March 1999, with the
exception of short leasehold accommodation
occupied by the Company for the purposes of its
business. As is your customary practice, all
properties for which there was an unconditional
contract to purchase at the valuation date have
been included in the valuation and those for which
there was an unconditional contract for sale have
been excluded.

The properties have been valued individually on
the basis of “Open Market Value” in accordance
with the Appraisal and Valuation Manual published
by the Royal Institution of Chartered Surveyors and
the valuation has been undertaken by us as External
Valuers. Open Market Value is defined as:

“an opinion of the best price at which the sale of an
interest in property would have been completed
unconditionally for cash consideration on the date of
valuation, assuming:
a) a willing seller;
b)

for

the

interest,

that, prior to the date of valuation, there had been
a reasonable period (having regard to the nature of
the property and the state of the market) for the
the
proper marketing of
agreement of the price and terms and for the
completion of the sale;
that the state of the market, level of values and
other circumstances were, on any earlier assumed
date of exchange of contracts, the same as on the
date of valuation;
that no account is taken of any additional bid by a
prospective purchaser with a special interest; and
that both parties
transaction had
to
acted knowledgeably, prudently and without
compulsion”.

the

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1999
£m

500.2

427.5

(29.0)

398.5

399.1

38.7

(144.5)

£m

265.9

1998
£m

484.0

414.1

(28.1)

386.0

386.1

34.3

(154.4)

293.3

266.0

LAND SECURITIES PLC | Operating and Financial Review

Consolidated Profit and Loss Account

for the year ended 31 March 1999

Notes

£m

G R O S S P R O P E R T Y I N C O M E

N E T R E N TA L I N C O M E

Property management and administration expenses

O P E R AT I N G P R O F I T

Profit on sales of properties

P R O F I T O N O R D I N A RY AC T I V I T I E S B E F O R E I N T E R E S T A N D TA X AT I O N

Interest receivable and similar income
Interest payable and similar charges
Revenue profit
Profit on sales of properties

P R O F I T O N O R D I N A RY AC T I V I T I E S B E F O R E TA X AT I O N

Taxation on:
Revenue profit
Property sales
Taxation

P R O F I T O N O R D I N A RY AC T I V I T I E S A F T E R TA X AT I O N

Dividends

R E TA I N E D P R O F I T F O R T H E F I N A N C I A L Y E A R

E A R N I N G S P E R S H A R E

A D J U S T E D E A R N I N G S P E R S H A R E

D I V I D E N D S P E R S H A R E

D I V I D E N D C OV E R (times)
Profit after taxation
Profit excluding results of property sales after taxation

292.7

(76.8)

(.1)

(76.9)

216.4

(165.2)

51.2

Basic

Diluted

39.21p

39.11p

38.95p

38.86p

1999

29.50p

1.31

(67.9)

(1.4)

Basic

36.84p

37.07p

(69.3)

196.7

(151.6)

45.1

Diluted

36.55p

36.77p

1998

28.00p

1.30

1.31

All income was derived from within the United Kingdom from continuing operations. No operations were discontinued during the year.
The notes on pages 48 to 61 form an integral part of these financial statements.

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Operating and Financial Review | LAND SECURITIES PLC

Balance Sheets

31 March 1999

Group

Company

Notes

1999
£m

1998
£m

1999
£m

1998
£m

6,910.5

6,435.7

2,117.9

1,931.2

13.1

9.7

6,923.6

6,445.4

–

4,830.1

6,948.0

–

4,629.5

6,560.7

71.5

1.0

486.6

–

559.1

(424.8)

134.3

69.5

28.5

547.3

645.4

(418.4)

227.0

58.5

–

14.3

–

72.8

39.5

27.6

17.9

–

85.0

(194.4)

(121.6)

(210.3)

(125.3)

7,057.9

6,672.4

6,826.4

6,435.4

(1,295.0)

(1,295.5)

(1,286.4)

(1,286.7)

(272.4)

(20.1)

(355.1)

(20.3)

(66.7)

(7.0)

(149.9)

(6.9)

5,470.4

5,001.5

5,466.3

4,991.9

554.3

284.0

541.1

213.1

554.3

284.0

541.1

213.1

3,286.5

3,028.7

3,750.0

3,430.8

632.0

713.6

556.9

661.7

179.4

698.6

158.2

648.7

5,470.4

5,001.5

5,466.3

4,991.9

987p

975p

924p

910p

F I X E D A S S E T S

Tangible assets
Properties
Other tangible assets

Investments in group undertakings

C U R R E N T A S S E T S

Debtors falling due within one year
Debtors falling due after more than one year
Investments: short term deposits and corporate bonds
Cash at bank and in hand

C R E D I T O R S falling due within one year

N E T C U R R E N T A S S E T S / ( L I A B I L I T I E S )

T O TA L A S S E T S L E S S C U R R E N T L I A B I L I T I E S

C R E D I T O R S falling due after more than one year
Debentures, bonds and loans
Convertible bonds
Other creditors

C A P I TA L A N D R E S E R V E S

Called up share capital
Share premium account
Revaluation reserve
Other reserves
Profit and loss account

E Q U I T Y S H A R E H O L D E R S ’ F U N D S

N E T A S S E T S P E R S H A R E

D I LU T E D N E T A S S E T S P E R S H A R E

P G Birch

J I K Murray

Directors

The financial statements on pages 44 to 61 were approved by the Directors on 26 May 1999.

LAND SECURITIES PLC | Operating and Financial Review

Consolidated Cash Flow Statement

for the year ended 31 March 1999

N E T C A S H I N F LO W F R O M O P E R AT I N G AC T I V I T I E S

R E T U R N S O N I N V E S T M E N T S A N D S E R V I C I N G O F F I N A N C E

Interest received
Interest paid

N E T C A S H O U T F LO W F R O M R E T U R N S O N I N V E S T M E N T S A N D
S E R V I C I N G O F F I N A N C E

TA X AT I O N – Corporation tax paid

N E T C A S H I N F LO W F R O M O P E R AT I N G AC T I V I T I E S A N D I N V E S T M E N T S A F T E R
F I N A N C E C H A R G E S A N D TA X AT I O N

C A P I TA L E X P E N D I T U R E

Additions to properties
Sales of properties
Investing in properties
Increase in other tangible assets

Notes

£m

1999
£m

409.9

£m

26.9

(202.2)

(196.0)

246.3

50.3

(3.7)

36.3

(143.7)

(255.6)

126.0

(129.6)

(5.8)

(107.4)

(73.4)

229.1

(135.4)

(155.6)

(61.9)

60.7

N E T C A S H ( O U T F LO W ) / I N F LO W O N C A P I TA L E X P E N D I T U R E

E Q U I T Y D I V I D E N D S PA I D

C A S H ( O U T F LO W ) / I N F LO W B E F O R E U S E O F L I Q U I D R E S O U R C E S A N D F I N A N C I N G

M A N A G E M E N T O F L I Q U I D R E S O U R C E S

F I N A N C I N G

Issues of shares
Decrease in debt

N E T C A S H I N F LO W / ( O U T F LO W ) F R O M F I N A N C I N G

D E C R E A S E I N C A S H I N Y E A R

R E C O N C I L I AT I O N O F N E T C A S H F LO W T O M OV E M E N T S I N N E T D E B T

Decrease in cash in year
Cash outflow from decrease in debt
Cash (inflow)/outflow from (decrease)/increase in liquid resources
Change in net debt resulting from cash flow
Non-cash changes in debt
Movement in net debt in year
Net debt at 1 April
Net debt at 31 March

23(a)

23(b)

1.6

(.8)

3.6

(15.2)

(.4)

(60.7)

(60.3)

82.5

22.2

(1,104.9)

(1,082.7)

(1,362.7)

(1,104.9)

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1998
£m

399.5

(175.3)

(56.0)

168.2

46.6

(142.5)

72.3

(61.5)

(11.6)

(.8)

15.2

61.5

75.9

181.9

257.8

Operating and Financial Review | LAND SECURITIES PLC

Other Primary Statements

for the year ended 31 March 1999

S TAT E M E N T O F T O TA L R E C O G N I S E D G A I N S A N D LO S S E S

Profit on ordinary activities after taxation (page 44)
Unrealised surplus on valuation of properties
Total gains and losses recognised since last financial statements

N O T E O F H I S T O R I C A L C O S T P R O F I T S A N D LO S S E S

Profit on ordinary activities before taxation (page 44)
Valuation surplus of previous years realised on sales of properties
Historical cost profit on ordinary activities before taxation
Taxation
Historical cost profit on ordinary activities after taxation
Dividends
Retained historical cost profit for the year

R E C O N C I L I AT I O N O F M OV E M E N T S I N E Q U I T Y S H A R E H O L D E R S ’ F U N D S

Profit on ordinary activities after taxation (page 44)
Dividends
Retained profit for the financial year (page 44)
Unrealised surplus on valuation of properties
Premium arising on issues of shares
Increase in share capital

Opening equity shareholders’ funds
Closing equity shareholders’ funds

Notes

1999

£m

216.4

332.9

549.3

1999

£m

293.3

75.1

368.4

(76.9)

291.5

(165.2)

126.3

1999

£m

216.4

(165.2)

51.2

332.9

71.6

13.2

468.9

5,001.5

5,470.4

1998

£m

196.7

733.0

929.7

1998

£m

266.0

53.3

319.3

(69.3)

250.0

(151.6)

98.4

1998

£m

196.7

(151.6)

45.1

733.0

160.6

25.6

964.3

4,037.2

5,001.5

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LAND SECURITIES PLC | Operating and Financial Review

Notes to the Financial Statements

for the year ended 31 March 1999

1 Accounting Policies

The financial statements have been prepared
under the historical cost convention
modified by the revaluation of properties
and in accordance with applicable
accounting standards. Compliance with
SSAP 19 “Accounting for Investment
Properties” requires a departure from the
requirements of the Companies Act 1985
relating to depreciation and amortisation
and an explanation of this departure is given
in (e) below.

The significant accounting policies adopted
by the group are set out below.

( a ) C O N S O L I DAT I O N
The consolidated financial statements of
the group include the audited financial
statements of the company and group
undertakings, all of which were for the
year ended 31 March 1999.

( b ) C O N S O L I DAT E D P R O F I T A N D LO S S

AC C O U N T A N D O T H E R P R I M A RY

S TAT E M E N T S
The profit on ordinary activities before
taxation is arrived at after taking into
account income and outgoings on all
properties, including those under
development and, in accordance with
FRS3 “Reporting Financial Performance”,
profits and losses on sales of properties
calculated by comparing net sales proceeds
with book values.

Realised surpluses and deficits relating to
previous years on properties sold during
the year are taken to other reserves.

Unrealised capital surpluses and deficits,
including those arising on valuation of
properties, are taken to revaluation reserve.

( c ) TA X AT I O N
Taxation attributable to sales of properties
is charged against the profits realised.

No provision is made for taxation which
would become payable under present
legislation in the event of future sales of
the properties at the amounts at which they
are stated in the financial statements.
However an estimate of the potential
liability is shown in Note 8.

Deferred taxation is accounted for in respect of
timing differences between profit as computed
for taxation purposes and profit as stated in the
financial statements to the extent that liabilities
or assets are expected to be payable or
receivable in the foreseeable future.

( d ) P R O P E R T I E S
Properties are included in the financial
statements at open market values based on
the latest professional valuation. At
31 March 1999 a valuation was carried out
by Knight Frank and a copy of their report
is set out on page 43. The valuation
included all properties for which there
were unconditional contracts to purchase
but excluded those for which there were
unconditional contracts for sale. Additions
to properties include costs of a capital
nature only; interest and other costs in
respect of developments and refurbishments
are treated as revenue expenditure and
written off as incurred.

( e ) D E P R E C I AT I O N A N D A M O R T I S AT I O N
In accordance with SSAP 19, no depreciation
or amortisation is provided in respect of
freehold or leasehold properties held on
leases having more than 20 years unexpired.
This departure from the requirements of

the Companies Act 1985, for all properties
to be depreciated, is, in the opinion of the
Directors, necessary for the financial statements
to give a true and fair view in accordance with
applicable accounting standards, as properties
are included in the financial statements at their
open market value.

The effect of depreciation and amortisation
on value is already reflected annually in the
valuation of properties, and the amount
attributed to this factor by the valuers
cannot reasonably be separately identified
or quantified. Had the provisions of the Act
been followed, net assets would not have
been affected but revenue profits would have
been reduced for this and earlier years.

Other tangible assets are depreciated on a
straight-line basis over their estimated
useful lives of four to ten years.

( f ) I N V E S T M E N T S I N G R O U P

U N D E R TA K I N G S
The company’s investments in the shares
of group undertakings are stated at Directors’
valuation on a basis which takes account
of the professional valuation of the
properties of the group undertakings at
31 March 1999. Surpluses and deficits
arising from the Directors’ valuation are
taken to revaluation reserve.

( g ) P E N S I O N S
Contributions to defined benefit pension
schemes, based on independent actuarial
advice, are charged to the profit and loss
account on a basis that spreads the expected
cost of benefits over the employees’ working
lives with the group. Variations from regular
costs are spread over the anticipated remaining
working lives of employees in the schemes.

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Operating and Financial Review | LAND SECURITIES PLC

Notes to the Financial Statements

for the year ended 31 March 1999

2 Net Rental Income

Rental income
Service charges and other recoveries
Gross property income
Ground rents payable
Other property outgoings

1999

£m

453.6

46.6

500.2

(18.6)

(54.1)

(72.7)

427.5

1998

£m

438.9

45.1

484.0

(16.7)

(53.2)

(69.9)

414.1

Other property outgoings are costs incurred in the direct maintenance and upkeep of investment properties. Void costs, which include those relating to empty properties pending
redevelopment and refurbishment, costs of investigating potential development schemes which are not proceeded with and £4.2m (1998 £4.6m) in respect of housekeepers and outside
staff described as direct property services and shown in staff costs in Note 5, are also included.

3 Property Management and Administration Expenses

These include:
Auditors’ remuneration (Company: 1999 £66,000; 1998 £64,000)
Staff costs (Note 5)
Directors’ remuneration
Depreciation of other tangible assets

1999

£m

13.3

1.6

2.2

1998

£m

13.3

1.5
1.3

Property management and administration expenses consist of all costs of managing the portfolio, including the costs of staff involved in development projects, together with costs of rent
reviews and renewals, relettings of properties and all office administration and operating costs of the group. No staff costs or overheads are capitalised.
In addition to their fees for the audit, £275,400 (1998 £78,100) was payable to the auditors for other services. This comprised compliance and certification work £38,000 (1998 £25,100)
and taxation advice and consultancy fees £237,400 (1998 £53,000).

4 Interest

R E C E I VA B L E :

Short term deposits and corporate bonds
Other interest receivable

PAYA B L E :

Borrowings not wholly repayable within five years
Borrowings wholly repayable within five years
Other interest payable

1999

£m

36.8

1.9

38.7

1998

£m

33.7

34.3

142.5

152.7

1.0

1.2

144.5

154.4

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LAND SECURITIES PLC | Operating and Financial Review

Notes to the Financial Statements

for the year ended 31 March 1999

5 Staff and Pensions

E M P LOY E E S
The average number of employees during the year, excluding directors,
and the corresponding aggregate staff costs were:
Property management and administration
Direct property services:
Full time
Part time

S TA F F C O S T S
Salaries
Social Security
Other pension
Cash and share incentive schemes

1999
No.

1998
No.

1999
£m

1998
£m

258

188

494

277

219

577

13.3

3.9

17.5

12.6

1.2

2.2

1.5

17.5

4.2

17.9

13.2

1.2

2.3

1.2

17.9

P E N S I O N S
The group operates two funded Inland Revenue approved non-contributory pension schemes which provide defined benefits based on
final pensionable salary. Both schemes are closed to new entrants. The assets of these schemes are held in self-administered trust funds
which are separate from the group’s assets.
Contributions to the schemes are determined by qualified independent actuaries on the basis of triennial valuations using the projected
unit method.
For both schemes the key assumptions made in the valuations were a total annual investment return of 8%, assuming an increase of
3.8% in dividend income, annual increases of 6.25% in pensionable earnings and 4% in the Retail Prices Index.
The last valuations as at 6 April 1996, after excluding annuities purchased to provide for pensions in payment which are held outside
the two schemes, indicated the following:

Main scheme
Closed scheme

Value

of Assets

£28.6m

£2.8m

Funding

Level

102%

104%

The company has implemented the actuary’s recommendation that pension contributions to both schemes be adjusted to reduce
surpluses on a straight line basis over the remaining working lives of members in the schemes.
A contributory money purchase scheme was introduced on 1 January 1999 for all new administrative and senior property based staff,
subject to eligibility, together with a separate similar scheme, effective 1 April 1998, for other property based staff.
The charge to the profit and loss account for pension costs amounted to £2.8m (1998 £2.7m) which includes the costs of permitting
scheme members to select a reduced retirement age of 60.
No other post-retirement benefits are made available to employees of the group.

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Operating and Financial Review | LAND SECURITIES PLC

Notes to the Financial Statements

for the year ended 31 March 1999

6 Executive and Savings Related Share Option Schemes

At 1 April 1998
Granted
Exercised
Lapsed
At 31 March 1999

No. of Options

1984

1983 & 1993

Executive

Savings Related

Option
price

Share Option
Scheme

Share Option
Schemes

553,950

469,414

736p

61,636

(96,050)

(91,468)

–

(28,793)

457,900

410,789

The options outstanding under the executive share option scheme are exercisable at prices between 503.7p and 618.6p, up to the year 2004. The options outstanding under the savings
related share option schemes are exercisable at prices between 324p and 736p, after three, five or seven years from the date of grant.

7 Directors’ Emoluments, Share Options and Interests in Ordinary Shares

E M O LU M E N T S
The emoluments of the directors including pension contributions and £178,500 receivable (1998 £Nil) under the long term incentive plan amounted to £1,891,000 (1998 £1,620,000).

£’000

E X E C U T I V E :

I J Henderson
M R Griffiths
K Redshaw
J I K Murray
Sir Peter Hunt (Chairman – to 8.12.97)

N O N - E X E C U T I V E :

P G Birch (Chairman – appointed 1.7.98)
John Hull (Chairman – to 30.6.98)
H I Connick (retired 1.7.98)
P B Hardy
Sir Alistair Grant
Total 1999
Total 1998

Basic

Salary

300

205

212

–

922

1,024

Profit

Sharing

& Bonuses

Benefits

Car &

Medical

Total Emoluments

excluding Pensions

Pension

Contributions

Fees

1999

1998

1999

1998

–

118

160

–

100

236

146

347

244

238

247

–

114

282

228

223

234

250

126

–

1,335

378

1,363

257

Benefits include all assessable tax benefits arising from employment within the group comprising the provision of a company car, private medical facilities, the value of shares allocated under
the 1989 Profit Sharing Scheme, payments under the profit related pay scheme and a bonus of 5 per cent of salary payable under the annual bonus scheme.
The total emoluments of the highest paid director, including £58,625 (1998 £Nil) receivable under the long term incentive plan but excluding pension contributions, amounted to
£405,625 (1998 £337,300 including gains before tax of £114,300 on the exercise of share options). The accrued pension as at 31 March 1999 for the highest paid director was
£173,500 (1998 £93,000).
Pensions of £173,000 (1998 £148,700) were paid to former directors. A brief explanation of pension arrangements for directors, including a table of accrued pension entitlements as at
31 March 1999, and details of amounts receivable under the long term incentive plan are provided on page 37.

LAND SECURITIES PLC | Operating and Financial Review

Notes to the Financial Statements

for the year ended 31 March 1999

7 Directors’ Emoluments, Share Options and Interests in Ordinary Shares continued

O P T I O N S OV E R O R D I N A RY S H A R E S

Granted during year

Exercised during year

Options at 31 March 1999

I J Henderson

M R Griffiths

K Redshaw

J I K Murray

No. of

options

at 1 April

1998

27,000

7,508

33,500

5,720

6,329

42,000

6,258

No.

529

468

Grant

price

(pence)

Exercise

price

(pence)

No.

Market

price on

exercise

(pence)

736.0

2,168

415.0

858.5

No.

27,000

7,508

33,500

4,081

6,797

5,000

618.6

927.0

37,000

6,258

Exercise

price

(pence)

618.6

439.4*

618.6

572.9*

469.7*

618.6

455.3*

Exercisable dates

7/1997 – 7/2004

7/1999 – 7/2004

7/1997 – 7/2004

8/2000 – 7/2005

7/1999 – 7/2004

7/1997 – 7/2004

7/1999 – 7/2004

* weighted average exercise price

The range of the closing middle market prices for Land Securities shares during the year was 701.5p to 1078.0p. The middle market price at 31 March 1999 was 820p.
No options lapsed during the year.
The share options are held under the 1984 Executive Share Option Scheme, except for those shown in italics which are held under the 1983 and 1993 Savings Related Share Option
Schemes.
The aggregate of gains before tax made by the directors on exercise of share options during the year amounted to £25,000 (1998 £169,200).
The 1984 Executive Share Option Scheme was approved by the Inland Revenue on 24 April 1985 and permitted the Remuneration Committee to grant options to directors and key
executives for a consideration of £1 for each grant. The Scheme, which expired on 24 April 1995, complied with best practice at the time of its introduction and included such standard
terms as a limitation on the aggregate value of grants to each selected executive of four times that individual’s annual remuneration and a bar on the exercise of options within three years
of their issue.
Options granted under the savings related schemes are exercisable at prices between 324p and 736p per share after five or seven years from date of grant.
Non-executive directors do not participate in, and hence do not hold any options under, the group’s share option schemes.

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Operating and Financial Review | LAND SECURITIES PLC

Notes to the Financial Statements

for the year ended 31 March 1999

7 Directors’ Emoluments, Share Options and Interests in Ordinary Shares continued

I N T E R E S T S I N O R D I N A RY S H A R E S

The beneficial interests of the directors in the ordinary shares of the company as at 31 March were:

P G Birch
John Hull
I J Henderson
M R Griffiths
K Redshaw
J I K Murray
P B Hardy
Sir Alistair Grant

No. of shares

1999

12,722

2,907

71,895

25,035

27,643

22,990

19,200

15,000

1998

200

2,907

70,968

21,984

25,367

22,006

19,200

5,000

John Hull, I J Henderson, M R Griffiths and J I K Murray are Trustees of the 1989 Profit Sharing Scheme and as a consequence at 31 March 1999 held a non-beneficial interest in 224,618
shares (1998 238,308 shares). The beneficial interests of I J Henderson, M R Griffiths and J I K Murray each include 3,029 shares (1998 3,424 shares) appropriated under the scheme,
which are also included in their non-beneficial holdings.
There have been no changes in the beneficial and non-beneficial shareholdings of the directors since the end of the financial year up to 26 May 1999.
No director had any other interests in the securities of Land Securities PLC or any of its subsidiary undertakings during the year.
The registers of directors’ share and debenture interests and holdings of options, which are open to inspection at the company’s registered office, contain full details of directors’ interests.

8 Taxation

The charge for taxation is made up as follows:
Revenue profit at the Corporation Tax rate of 31% (1998 31%)
Tax allowances on expenditure relating to properties
Movement in deferred taxation
Other adjustments

Adjustments relating to previous years
On revenue profit
On property sales

1999

£m

90.7

(12.8)

(.3)

77.3

(.5)

76.8

76.9

1998

£m

82.4

(12.8)

(1.1)

69.2

(1.3)

67.9

1.4

69.3

The amount of tax on capital gains which would become payable in the event of sales of the properties at the amounts at which they are stated in Notes 11(a) and (b) is in the region of
£430m (1998 £350m) for the group and £155m (1998 £120m) for the company.

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LAND SECURITIES PLC | Operating and Financial Review

Notes to the Financial Statements

for the year ended 31 March 1999

9 Equity Dividends

Interim paid
Proposed final

1999

pence

1998

pence

per share

7.85

21.65

29.50

7.60

20.40

28.00

1999

1998

£m

45.2

120.0

165.2

£m

41.2

110.4

151.6

Interim paid includes an additional £1.7m (1998 £0.2m) of prior year final dividend arising from increases in share capital before the record date of 5 June 1998.

10 Earnings and Net Assets per Share

E A R N I N G S P E R S H A R E

Earnings per share
Effect of dilutive securities:
Convertible bonds
Share options
Diluted earnings per share

A D J U S T E D E A R N I N G S P E R S H A R E

Earnings per share
Effect of results of property sales after taxation
Adjusted earnings per share

Diluted earnings per share
Effect of results of property sales after taxation
Adjusted diluted earnings per share

Profit after taxation

1999

£m

216.4

1998

£m

196.7

13.0

7.2

229.4

203.9

Weighted average

no. of shares

1999

551.9

36.8

589.0

1998

533.9

23.4

557.9

Earnings per share

1999

pence

39.21

1998

pence

36.84

38.95

36.55

216.4

(.5)

215.9

229.4

(.5)

228.9

196.7

1.3

198.0

203.9

1.3

205.2

551.9

533.9

551.9

533.9

589.0

557.9

589.0

557.9

39.21

(.10)

39.11

38.95

(.09)

38.86

36.84

.23

37.07

36.55

.22

36.77

Adjusted earnings and adjusted diluted earnings per share have been disclosed to show measures of earnings that reflect the principal
operating activities of the group.

N E T A S S E T S P E R S H A R E
Net assets per share are calculated on net assets of £5,470.4m (1998 £5,001.5m) and on 554.3m shares (1998 541.1m shares).
The diluted net assets per share are calculated on adjusted net assets of £5,747.9m (1998 £5,356.6m) and on 589.6m shares
(1998 588.5m shares) after adjusting for the effects of the exercise of share options and of conversion rights relating to the
convertible bonds on net assets and the number of shares in issue.

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Operating and Financial Review | LAND SECURITIES PLC

Notes to the Financial Statements

for the year ended 31 March 1999

11 Properties

(a) G R O U P
At 1 April 1998: at valuation
Additions
Reclassifications
Sales

Unrealised surplus on valuation (Note 21(a))
At 31 March 1999: at valuation

(b) C O M PA N Y
At 1 April 1998: at valuation
Additions
Transfers from group undertakings
Transfer to a group undertaking
Sales

Unrealised surplus/(deficit) on valuation (Note 21(b))
At 31 March 1999: at valuation

Leasehold

Over 50

Under 50

Freehold
£m

years to run
£m

Total
£m

4,981.8

1,411.5

42.4

6,435.7

213.5

31.7

(108.6)

52.2

(38.6)

(16.8)

5,118.4

1,408.3

275.6

55.1

5,394.0

1,463.4

1.6

6.9

–

50.9

2.2

53.1

267.3

(125.4)

6,577.6

332.9

6,910.5

1,689.3

232.8

9.1

1,931.2

48.4

22.2

(21.9)

(22.2)

1,715.8

164.1

1,879.9

5.9

7.9

–

(7.9)

238.7

(10.9)

227.8

–

9.1

1.1

54.3

30.1

(21.9)

(30.1)

1,963.6

154.3

10.2

2,117.9

In respect of the group: freeholds include £371.1m (1998 £316.2m) of leaseholds with unexpired terms exceeding 900 years; leaseholds under 50 years to run include £9.7m
(1998 £8.2m) with unexpired terms of 20 years or less.
The historical cost of properties are: group £3,434.2m (1998 £3,217.2m); company £769.7m (1998 £716.1m).

12 Commitments for Future Expenditure

Under contract
Board authorisations not contracted

13 Other Tangible Assets

At 1 April 1998
Additions
Disposals
Depreciation for the year
At 31 March 1999

1999

£m

102.8

55.8

158.6

Group

Company

1998

£m

106.3

57.3

163.6

Cost

£m

19.7

6.0

(1.0)

24.7

1999

£m

34.4

8.8

43.2

Depreciation

£m

(10.0)

(2.4)

(11.6)

1998

£m

76.1

–

76.1

Net

£m

9.7

6.0

(.2)

(2.4)

13.1

Other tangible assets comprise computers, motor vehicles, furniture, fixtures and fittings and improvements to group offices.
Depreciation for the year includes £0.2m (1998 £0.2m) treated as other property outgoings in Note 2.

LAND SECURITIES PLC | Operating and Financial Review

Notes to the Financial Statements

for the year ended 31 March 1999

14 Investments in Group Undertakings

At 1 April 1998
Increase during the year
Unrealised valuation surplus (Note 21(b))
At 31 March 1999

£m

4,445.6

–

186.1

4,631.7

Loans

£m

183.9

14.5

Total

£m

4,629.5

14.5

186.1

198.4

4,830.1

Shares comprise ordinary shares of group undertakings and are stated in accordance with the accounting policy explained in Note 1(f).
Shares at 1 April 1998 included valuation surpluses of £2,404.0m. Loans to group undertakings have no fixed repayment dates.
The principal group undertakings, all of which are wholly owned, incorporated and operating in the United Kingdom, are noted on page 41. As permitted by Section 231 Companies Act
1985, a complete listing of all of the group undertakings has not been provided on the grounds that the information would be of an unduly excessive length. A complete list of group
undertakings will, however, be filed with the Annual Return.

Group

Company

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15 Debtors

Falling due within one year:
Trade debtors
Capital debtors
Other debtors
Prepayments and accrued income
Taxation recoverable

Falling due after more than one year:
ACT recoverable
Capital debtors
Other debtors

16 Creditors falling due within one year

Debentures and loans (Note 17)
Overdraft
Trade creditors
Taxation and Social Security
Proposed final dividend
ACT on proposed final dividend
Capital creditors
Other creditors
Accruals and deferred income
Deferred taxation

1999

£m

21.8

12.0

11.1

26.6

–

71.5

–

1.0

1999
£m

1.6

2.2

58.4

120.0

–

65.1

16.7

160.5

–

424.8

1998

£m

27.2

9.5

8.7

24.1

–

69.5

27.6

28.5

1998
£m

1.7

–

1.5

54.6

110.4

27.6

48.4

14.0

160.0

418.4

Group

1999

£m

7.6

3.6

3.9

3.2

40.2

58.5

–

1999
£m

1.5

–

1998

£m

5.7

3.2

4.1

25.6

39.5

27.6

–

27.6

1998
£m

1.6

–

Company

120.0

110.4

–

12.7

10.6

49.6

–

27.6

11.8

10.0

48.9

–

194.4

210.3

Debentures and loans include £0.6m (1998 £0.6m) and £0.5m (1998 £0.5m) of instalments of borrowings that mature after more than one year repayable by the group and company respectively.

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Operating and Financial Review | LAND SECURITIES PLC

Notes to the Financial Statements

for the year ended 31 March 1999

17 Debentures, Bonds and Loans

U N S E C U R E D

9.762 per cent Unsecured Loan Notes 1990/99
103⁄4 per cent Exchange Bonds due 2004
91⁄2 per cent Bonds due 2007
£200m 9 per cent Bonds due 2020

S E C U R E D
43⁄4 per cent First Mortgage Debenture Stock 1970/2005
61⁄4 per cent Mortgage Debenture 2000/05
61⁄2 per cent Mortgages 2000/05
83⁄4 per cent Mortgage 2001/04
73⁄4 per cent Mortgage 2008
63⁄8 per cent First Mortgage Debenture Stock 2008/13
10 per cent First Mortgage Debenture Stock 2025
10 per cent First Mortgage Debenture Stock 2027
10 per cent First Mortgage Debenture Stock 2030
Sundry mortgage

Falling due within one year (Note 16)
Falling due after more than one year

Group

Company

1999
£m

1.0

21.2

200.0

196.0

418.2

12.2

9.1

10.0

5.7

32.3

400.0

200.0

–

1998
£m

1.1

21.2

200.0

195.8

418.1

12.4

9.3

10.0

5.7

32.3

400.0

200.0

1999
£m

1.0

21.2

200.0

196.0

418.2

9.2

9.1

10.0

–

32.3

400.0

200.0

–

1998
£m

1.1

21.2

200.0

195.8

418.1

9.3

10.0

–

32.3

400.0

200.0

–

1,296.6

1,297.2

1,287.9

1,288.3

(1.6)

(1.7)

(1.5)

(1.6)

1,295.0

1,295.5

1,286.4

1,286.7

Secured loans are charged on properties of the company and its group undertakings. From time to time, short term deposits are charged as temporary security until substitutions have been
agreed for properties taken out of charge. At 31 March 1999, short term deposits of the group £19.3m (1998 £12.0m) and of the company £14.3m (1998 £12.0m) were charged as
temporary security for borrowings.
The company has guaranteed £3.0m (1998 £3.1m) of debentures and loans of its group undertakings.
Borrowings of group undertakings of £8.7m (1998 £8.9m) are secured by charges on properties of the company and its group undertakings.

18 Convertible Bonds

£210m 6 per cent Guaranteed Convertible Bonds due 2007
7 per cent Convertible Bonds due 2008

Group

Company

1999

£m

205.7

66.7

272.4

1998

£m

205.2

149.9

355.1

1999

£m

–

66.7

1998

£m

–

149.9

In accordance with the terms of their relevant Trust Deeds:
1) The 6 per cent Guaranteed Convertible Bonds, issued by Land Securities Finance (Jersey) Limited and guaranteed by the company, (i), at the holder’s option may be converted, up to and
including 22 March 2007, into 21⁄2 per cent Exchangeable Redeemable Preference Shares in the issuer which are exchangeable for up to a maximum of 24,027,345 ordinary shares of
£1 each in Land Securities PLC at 874p per share or (ii), at the option of the issuer may be redeemed on or after 14 April 2002 at par; earlier redemption can only take place if at least 85%
of the bonds have been converted into ordinary shares or have been purchased or redeemed and then cancelled. During the year £1,000 of the bonds were converted into the issuing
company’s preference shares which were then exchanged for 114 fully paid shares of £1 each.
2) The 7 per cent Convertible Bonds (i), at the holders’ option may be converted, up to and including 23 September 2008, into a maximum of 10,421,568 fully paid shares of £1 each
at a conversion price of 640p per share or (ii), at the option of the company, may be redeemed at par. During the year, £83,184,000 of the bonds were converted into 12,997,495 fully
paid shares of £1 each.

LAND SECURITIES PLC | Operating and Financial Review

Notes to the Financial Statements

for the year ended 31 March 1999

19 Other Creditors falling due after more than one year

Deferred income
Deferred taxation
Capital creditors
Other creditors

20 Called up Share Capital
Ordinary shares of £1 each:
Authorised
Allotted and fully paid

During the year shares were allotted as follows:
Under the 1989 Profit Sharing Scheme
On the exercise of options granted under:

1983 and 1993 Savings Related Share Option Schemes (Note 6)
1984 Executive Share Option Scheme (Note 6)

On conversions of:

6 per cent Guaranteed Convertible Bonds due 2007
7 per cent Convertible Bonds due 2008

Group

Company

1999
£m

17.5
.1
–
2.5

20.1

1998
£m

15.4
.2
2.4
2.3

20.3

1999
£m

–
–
–
7.0

7.0

1999
£m

1998
£m

5.4
–
.6
.9

6.9

1998
£m

720.0

554.3

720.0

541.1

Cash consideration received
£m

.4
.5

No. of shares

75,437

91,468
96,050

114
12,997,495

1.6 13,260,564

The exercise of all options outstanding at 31 March 1999, granted under the 1983 and 1993 Savings Related Share Option Schemes and the 1984 Executive Share Option Scheme, would
result in the issue of a further 868,689 ordinary shares.

21 Reserves
(a) G R O U P
At 1 April 1998
Premium arising on issues of shares
Unrealised surplus on valuation of properties (Note 11(a))
Realised on sales of properties
Retained profit for the year (page 44)
Amortised discount and issue expenses of bonds
At 31 March 1999

Share premium
account
£m

Revaluation
reserve
£m

Other
reserves
£m

Profit and
loss account
£m

213.1
71.6

(.7)

3,028.7

556.9

661.7

332.9
(75.1)

75.1

51.2
.7

Total
£m

4,460.4
71.6
332.9

51.2

284.0

3,286.5

632.0

713.6

4,916.1

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(b) C O M PA N Y
At 1 April 1998
Premium arising on issues of shares
Unrealised surplus on valuation of properties (Note 11(b))
Realised on sales of properties
Revaluation of shares in group undertakings (Note 14)
Retained profit for the year
Amortised discount and issue expenses of bonds
At 31 March 1999
Land Securities PLC has not presented its own profit and loss account, as permitted by Section 230(1)(b) Companies Act 1985. The retained profit for the year of the company, dealt with in
its financial statements, was £50.2m (1998 £35.4m).

154.3
(21.2)
186.1

4,450.8
71.6
154.3

213.1
71.6

50.2
(.3)

186.1
50.2
(1.0)

4,912.0

3,750.0

3,430.8

648.7

698.6

284.0

158.2

179.4

21.2

(.7)

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Operating and Financial Review | LAND SECURITIES PLC

Notes to the Financial Statements

for the year ended 31 March 1999

22 Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities

Operating profit (page 44)
Depreciation (Note 13)
Decrease in debtors
Increase in creditors
Net cash inflow from operating activities

23 Analysis of Net Cash Flows

(a) M A N A G E M E N T O F L I Q U I D R E S O U R C E S

Net decrease/(increase) in short term deposits
Sales of corporate bonds
Net cash inflow/(outflow) from management of liquid resources

Liquid resources comprise short term deposits and corporate bonds which are readily realisable within one year.

(b) CASH MOVEMENT IN DEBT

Debt due within one year – Repayment of secured debt
Debt due within one year – Repayment of unsecured debt

Debt due after one year
Decrease in debt

– Repayment of secured debt

24 Analysis of Net Debt

Cash at bank and in hand/(overdraft)
Liquid resources
Debt due within one year
Debt due after one year
Net debt

1999

£m

398.5

2.4

2.9

6.1

409.9

1999

£m

45.7

15.0

60.7

1999

£m

(.6)

(.1)

(.7)

(.1)

(.8)

1998

£m

386.0

1.5

11.9

399.5

1998

£m

(66.5)

5.0

(61.5)

1998

£m

(15.1)

(.1)

(15.2)

–

(15.2)

1 April

1998

£m

547.3

(1.7)

(1,650.6)

(1,104.9)

Movements during year

31 March

Cash Flow

Non-Cash

£m

(.4)

(60.7)

(60.3)

£m

(.6)

83.1

82.5

1999

£m

(.3)

486.6

(1.6)

(1,567.4)

(1,082.7)

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LAND SECURITIES PLC | Operating and Financial Review

Notes to the Financial Statements

for the year ended 31 March 1999

25 Financial Assets and Liabilities

This note should be read in conjunction with the comments set out in the Operating and Financial Review on page 29.
The group has defined financial assets and liabilities as those assets and liabilities of a financial nature, namely cash, investments and
borrowings. Short term debtors/creditors, capital debtors/creditors, taxation and prepayments and accruals have been excluded.
All of the group’s financial assets and liabilities are sterling based and at fixed rates. There are no floating rate financial assets
or liabilities.

F I N A N C I A L A S S E T S
The group’s financial assets and their maturity profile are:

Assets:
Short term investments
Cash at bank and in hand

Maturing in:
One year or less, or on demand

Weighted average period of fixed interest rates
Weighted average interest rate

F I N A N C I A L L I A B I L I T I E S
The group’s financial liabilities and their maturity profile (together with that of the company’s) are:

Liabilities:
Debentures, bonds and other loans (Note 17)
Convertible bonds (Note 18)
Overdraft (Note 16)

1999

£m

486.6

–

486.6

1999

£m

1998

£m

547.3

547.4

1998

£m

486.6

547.4

105 days

6.1%

77 days

7.3%

1999

£m

1998

£m

1,296.6

1,297.2

272.4

355.1

–

1,569.3

1,652.3

Operating and Financial Review | LAND SECURITIES PLC

Notes to the Financial Statements

for the year ended 31 March 1999

25 Financial Assets and Liabilities continued

F I N A N C I A L L I A B I L I T I E S c o n t i n u e d

Repayable in:
One year or less, or on demand (Note 16)
More than one year but no more than two years
More than two years but no more than five years
More than five years

Group

Company

1998

£m

1.7

1.8

1999

£m

1.5

11.5

1998

£m

1.6

1.5

1999

£m

1.9

11.7

1,555.1

1,569.3

1,648.2

1,652.3

1,341.1

1,354.6

1,434.6

1,438.2

Weighted average period of fixed interest rates
Weighted average interest rate

19.8 years

20.3 years

9.0%

8.9%

The amount of debt that is repayable by instalments, where any of the instalments fall due after more than five years, is not material.

FA I R VALU E S O F F I N A N C I A L A S S E T S A N D L I A B I L I T I E S

Short term investments and cash
Debentures, bonds, other loans and overdraft
Convertible bonds

Group

Book Value

Fair Value

1999

£m

486.6

1998

£m

547.4

1999

£m

487.8

1998

£m

547.1

(1,296.9)

(1,297.2)

(1,977.0)

(1,760.3)

(272.4)

(355.1)

(316.2)

(537.1)

Fair value has been calculated by taking the market value, where available, and using a discounted cash flow approach for those financial assets and liabilities that do not have a published
market value.
It is the intention of the group to repay its debentures, bonds and other loans at maturity. The difference between book value and fair value will not result in any change to the cash outflows
of the group unless, at some stage in the future, borrowings are purchased in the market.

B O R R O W I N G FAC I L I T I E S
The group’s various undrawn committed borrowing facilities are summarised below:

Expiring in:
One year or less, or on demand
More than one year but no more than two years
More than two years

No derivative contracts were entered into during either of the last two financial years.

1999

£m

100

–

150

250

1998

£m

125

250

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LAND SECURITIES PLC | Operating and Financial Review

Ten Year Record

based on the Consolidated Financial Statements for the year ended 31 March

A S S E T S E M P LOY E D
Properties
Short term deposits, corporate bonds and cash
Other assets

F I N A N C E D BY
Share capital
Reserves

E Q U I T Y S H A R E H O L D E R S ’ F U N D S
Borrowings
Other liabilities

R E V E N U E
Net rental income
Revenue profit

* Profit/(loss) on sales of properties

Pre-tax profit
Profit attributable to shareholders
Retained profit for the year

E A R N I N G S P E R S H A R E ( p e n c e )
On profit after taxation

* On results of property sales after taxation

Adjusted earnings per share

D I LU T E D E A R N I N G S P E R S H A R E ( p e n c e )

A D J U S T E D D I LU T E D E A R N I N G S P E R S H A R E ( p e n c e )

D I V I D E N D S P E R S H A R E ( p e n c e )

D I V I D E N D C OV E R ( t i m e s )
On profit after taxation
* On profit excluding results

of property sales after taxation

N E T A S S E T S P E R S H A R E ( p e n c e )

D I LU T E D N E T A S S E T S P E R S H A R E ( p e n c e )

M A R K E T P R I C E P E R S H A R E AT 3 1 M A R C H ( p e n c e )

1999
£m

1998
£m

1997
£m

1996
£m

1995
£m

1994
£m

1993
£m

1992
£m

1991
£m

1990
£m

6,910.5
486.6
85.6

6,435.7
547.4
107.7

5,760.0
486.7
91.6

5,265.7
335.2
94.6

5,169.6
209.6
102.5

5,032.4
241.5
98.7

4,098.6
234.2
93.3

4,300.6
307.2
104.2

4,708.5
168.7
112.1

5,611.1
266.8
125.8

7,482.7

7,090.8

6,338.3

5,695.5

5,481.7

5,372.6

4,426.1

4,712.0

4,989.3

6,003.7

554.3
4,916.1

5,470.4
1,569.3
443.0

541.1
4,460.4

5,001.5
1,652.3
437.0

515.5
3,521.7

4,037.2
1,849.4
451.7

510.2
3,014.3

3,524.5
1,767.2
403.8

510.0
3,023.8

3,533.8
1,572.6
375.3

509.8
2,943.3

3,453.1
1,573.3
346.2

504.8
2,039.5

2,544.3
1,515.6
366.2

504.6
2,295.5

2,800.1
1,516.5
395.4

504.4
2,866.5

3,370.9
1,268.8
349.6

504.1
3,927.6

4,431.7
1,280.5
291.5

7,482.7

7,090.8

6,338.3

5,695.5

5,481.7

5,372.6

4,426.1

4,712.0

4,989.3

6,003.7

427.5
292.7
.6
293.3
216.4
51.2

39.21
(.10)
39.11

38.95
38.86

29.50

1.31

987
975

820

414.1
265.9
.1
266.0
196.7
45.1

36.84
.23
37.07

36.55
36.77

28.00

1.30

1.31

924
910

1058

405.1
235.7
8.1
243.8
178.4
39.3

34.85
(1.68)
33.17

34.50
32.92

27.00

1.28

1.22

783
774

773

400.6
238.7
(1.1)
237.6
171.9
39.3

33.69
.23
33.92

33.46
33.67

26.00

1.30

691
688

626

400.0
241.3
3.4
244.7
179.7
52.2

35.23
(.67)
34.56

34.91
34.28

25.00

1.41

1.38

693
691

594

389.4
234.8
2.3
237.1
180.6
58.4

35.66
(.46)
35.20

35.30
34.87

24.00

1.48

1.46

677
676

628

380.7
233.4
(4.3)
229.1
165.7
50.4

32.83
.85
33.68

32.76
33.59

22.85

1.44

1.47

504
504

526

353.6
227.5
.6
228.1
167.9
58.1

33.28
(.66)
32.62

33.19
32.54

21.75

1.53

1.50

555
555

391

316.0
215.2
6.9
222.1
159.9
60.3

31.72
(.87)
30.85

31.66
30.81

19.75

1.61

1.56

668
667

537

260.9
175.1
9.1
184.2
128.6
42.9

25.52
(.88)
24.64

25.50
24.62

17.00

1.50

1.45

879
866

486

* These figures, in respect of 1997 only, are after deducting the cost of terminating interest rate swaps.

Properties, reserves and net assets per share reflect valuations of properties made by Knight Frank at each year end.
With the introduction of FRS3 effective for the year ended 31 March 1994, comparatives, where appropriate, have been restated. However, revenue profit, adjusted earnings and adjusted diluted earnings
per share and an alternative dividend cover, which exclude the results of property sales and other exceptional items, are still disclosed.

LAND SECURITIES PLC

Major Property Holdings

at 31 March 1999

At 31 March 1999 there were around 560 properties within the
portfolio. In the lists which follow, the valuation level for inclusion is £10m.

Office areas are approximately net and generally exclude basements,
storage and car parking spaces.

Dates indicate initial construction or later refurbishment (R).

FREEHOLD†
PART FREEHOLD, PART LEASEHOLD
AIR CONDITIONED
IN COURSE OF DEVELOPMENT OR REFURBISHMENT
SHOPPING CENTRE

† Properties shown as freeholds include properties held on leases at peppercorns or low

fixed rents for 900 years or more.

City, Midtown, West End
and Victoria properties:

EC1
(cid:4) MITRE HOUSE
160 Aldersgate Street: 188,500 ft2
(17,510 m2) offices, 20 flats and car
park, 1990.

EC2.

(cid:4) VERITAS HOUSE

119/125 Finsbury Pavement:
46,200 ft2 (4,290 m2) offices, 1991.

51/55 GRESHAM STREET

76,000 ft2 (7,060 m2) offices and
a restaurant, 1991.

(cid:4) MOORGATE HALL
143/171 Moorgate: 65,500 ft2
(6,090 m2) offices and 15,600 ft2
(1,450 m2) store, 1990.

(cid:4) DASHWOOD HOUSE

69 Old Broad Street: 115,800 ft2
(10,760 m2) offices, 1975 and
reinstatement after bomb damage,
1995.

EC3
(cid:2) KNOLLYS HOUSE
1/12 Byward Street: 83,600 ft2
(7,770 m2) offices, bank, post office
and 9 shops, 1964, part 1984 (R),
part 1988/91 (R), part 1998/99
(R). Part air conditioned.

23/39 EASTCHEAP

18,600 ft2 (1,730 m2) offices,
5 shops and restaurant, part 1986
(R) and part 1988 (R). Part
air conditioned.

6/12 FENCHURCH STREET

AND 1 PHILPOT LANE
51,400 ft2 (4,780 m2) offices and
shop, 1985.

13/23 FENCHURCH STREET

168,100 ft2 (15,620 m2) offices and
major retail unit, 1968 and 1984 (R).

109/114 FENCHURCH STREET

71,200 ft2 (6,610 m2) offices
and banking space and 2 shops,
1976, part 1991 (R) and part
1993/94/95 (R).

51/54 GRACECHURCH STREET

(cid:4) REGIS HOUSE

34,100 ft2 (3,170 m2) offices,
part 1981 (R) and part 1990 (R).

(cid:4) GRACECHURCH HOUSE
55 Gracechurch Street: 62,300 ft2
(5,790 m2) offices and 10,000 ft2
(930 m2) health club, 1993.

34/36 LIME STREET AND

7/11 CULLUM STREET
36,000 ft2 (3,340 m2) offices and 6
shops, 1974.

37/39 AND 40 LIME STREET
AND 4 FENCHURCH AVENUE
101,000 ft2 (9,380 m2) offices,
1971/72 (R) part 1988/90 (R),
part 1992/94 (R) and part
1998 (R).

(cid:4) NEW LONDON HOUSE

6 London Street: 66,500 ft2
(6,180 m2) offices, 2 shops,
2 restaurants and public house,
1993 (R).

ST CLARE HOUSE

28/35 Minories: 77,600 ft2
(7,210 m2) offices and restaurant,
part 1977 (R), part 1980/1985 (R),
part 1995 (R) and part 1998 (R).

14/15 PHILPOT LANE

32,400 ft2 (3,010 m2) offices, 1986.

1 SEETHING LANE

45,700 ft2 (4,250 m2) offices and
restaurant, 1977 (R) and part 1988 (R).

(cid:4) TOWER HOUSE

34/40 Trinity Square: 44,600 ft2
(4,140 m2) offices, 1979 (R).

EC4

(cid:4) CANNON STREET HOUSE

AND MARTIN HOUSE
87,200 ft2 (8,100 m2) offices,
1996 (R).

King William Street: 87,600 ft2
(8,140 m2) offices, public house
and 5,700 ft2 (530 m2) retail, 1998.

12/16 GOUGH SQUARE

26,900 ft2 (2,500 m2) offices, 1992.

33 KING WILLIAM STREET
130,500 ft2 (12,120 m2) offices
and public house, 1983.

50 LUDGATE HILL

118,800 ft2 (11,040 m2) offices,
12 shops, 2 public houses and
4 restaurants, 1985 (R).

26 OLD BAILEY

64,900 ft2 (6,030 m2) offices,
1984 (R).

FLEETBANK HOUSE
Salisbury Square: 122,400 ft2
(11,370 m2) offices, 1974.

8 SALISBURY SQUARE

115,200 ft2 (10,700 m2) offices, 1989.

LINTAS HOUSE
New Fetter Lane: 88,000 ft2
(8,180 m2) offices, 1958,
and 1999 (R)

21 NEW FETTER LANE
66,900 ft2 (6,220 m2) offices,
1978 (R), 1993 (R) and 1998 (R).

WC1

(cid:4) TURNSTILE HOUSE
High Holborn: 76,500 ft2
(7,110 m2) aparthotel, 1 shop and
restaurant, 1997.

(cid:4) (cid:5)

1 THEOBALD’S COURT

(formerly Adastral House),
Theobald’s Road: 124,000 ft2
(11,520 m2) offices.

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LAND SECURITIES PLC | Operating and Financial Review

Major Property Holdings

at 31 March 1999

(cid:4) (cid:5)

2 THEOBALD’S COURT

(formerly Lacon House),
Theobald’s Road: 205,000 ft2
(19,040 m2) offices, 2 shops
and leisure.

WC2

40 STRAND

92,200 ft2 (8,570 m2) offices and
8 shops, 1997 (R).

(cid:4) GRAND BUILDINGS
Trafalgar Square: 160,100 ft2
(14,870 m2) offices and 35,000 ft2
(3,250 m2) shops, 1991.

7/8 ESSEX STREET

28,100 ft2 (2,610 m2) offices,
1998 (R).

(cid:5) 6/17 TOTTENHAM

COURT ROAD
56,500 ft2 (5,250 m2) retail and
2,500 ft2 (230 m2) offices.

12/24 OXFORD STREET AND
2-5 TOTTENHAM COURT ROAD
1 store 90,000 ft2 (8,360 m2) and
3 shops 5,300 ft2 (490 m2), pre-
war, part 1995 (R) and part 1998.

26/32 OXFORD STREET

air conditioned bank, 1 large shop, a
kiosk, a restaurant and 11,300 ft2
(1,050 m2) educational use,
1983 (R).

(cid:4) OXFORD HOUSE

70/88 Oxford Street: 61,100 ft2
(5,680 m2) offices and 5 shops. Part
1994 (R).

455/473 OXFORD STREET
6 shops, 1963.

475/497 OXFORD STREET AND
PARK HOUSE
Park Street: 77,100 ft2 (7,160 m2)
offices and 9 shops, 1963.

484/504 OXFORD STREET AND
GULF HOUSE
88,200 ft2 (8,190 m2) offices and
7 shops, 1957.

(cid:4) LONDON HILTON ON

PARK LANE
500 rooms, casino and numerous
restaurants, 1963.

(cid:4) DEVONSHIRE HOUSE

Piccadilly: 152,700 ft2 (14,190 m2)
offices and 9 showrooms and shops,
1983 (R), part 1994 (R) and part
1996/97 (R).

PICCADILLY CIRCUS
44/48 Regent Street, 1/17
Shaftesbury Avenue, Denman Street,
Sherwood Street and Glasshouse
Street: 2 major retail trading units,
10 shops, kiosk, public house, 3
restaurants, 15,700 ft2 (1,460 m2)
offices and 7,200 ft2 (670 m2) of
illuminated advertising, part 1977
(R), part 1979 (redevelopment)
and part 1985 (R).

7 SOHO SQUARE

47,900 ft2 (4,450 m2) offices,
1995 (R).

1/11 HAY HILL

18,000 ft2 (1,670 m2) offices
and 6,600 ft2 (610 m2)
retail/showroom, 1987 (R).

SW1
(cid:2) BOWATER HOUSE
Knightsbridge: 266,100 ft2
(24,720 m2) offices, 1958.

49/75 BUCKINGHAM PALACE

ROAD AND 29 BRESSENDEN
PLACE
55,400 ft2 (5,150 m2) offices,
136 bedroom hotel, 30 flats and
7 shops, 1964, offices 1994 (R).

(cid:2) HAYMARKET HOUSE
Haymarket: 80,900 ft2 (7,520 m2)
offices and 38,700 ft2 (3,600 m2)
of restaurants, 1955, part 1992 (R)
and part 1997/98 (R).

10 BROADWAY

New Scotland Yard: 384,000 ft2
(35,670 m2) offices, banking space
and restaurant, 1966.

(cid:4) WELLINGTON HOUSE
Buckingham Gate: 53,500 ft2
(4,970 m2) offices, 1978.

(cid:4) THE HOME OFFICE

50 Queen Anne’s Gate: 316,000 ft2
(29,360 m2) offices, 1977.

PORTLAND HOUSE

Stag Place: 296,900 ft2 (27,580 m2)
offices and 16,200 ft2 (1,510 m2)
basement restaurant, 1959, part
1986/87 (R), part 1992/95 (R)
and part 1996/99 (R).

(cid:4) ELAND HOUSE

Stag Place: 249,400 ft2 (23,170 m2)
offices, 1995.

(cid:2) GLEN HOUSE
Stag Place: 96,600 ft2 (8,970 m2)
offices and 17 shops, 1962 and part
1983/84 and 1994 (R).

(cid:4) SELBORNE HOUSE
Victoria Street: 111,500 ft2
(10,360 m2) offices, 1966.

(cid:4) KINGSGATE HOUSE
Victoria Street: 152,400 ft2
(14,160 m2) offices
and 18 shops, 1987 (R).

(cid:4) WESTMINSTER CITY HALL

Victoria Street: 169,500 ft2
(15,750 m2) offices and bank,
1965.

(cid:4) ESSO HOUSE

Victoria Street: 215,900 ft2
(20,060 m2) offices, 2 banks,
14 shops and restaurant, 1963
and part 1991 (R).

(cid:4) 25 VICTORIA STREET

47,100 ft2 (4,380 m2) offices and
3,800 ft2 (350 m2) retail,1996.

(cid:4) SAGA PETROLEUM HOUSE

50 Victoria Street: 38,700 ft2
(3,600 m2) offices and 10,000 ft2
(930 m2) retail, 1997.

16 PALACE STREET

52,240 ft2 (4,850 m2) offices, 1960.

(cid:2) ROEBUCK HOUSE
Residential, 116 flats, 1 fitness
centre, 1960.

(cid:5) ST ALBAN’S HOUSE
Haymarket: 46,000 ft2 (4,270 m2)
offices and 2 restaurants, 1963 and
part 1987 (R).

1 WARWICK ROW

36,600 ft2 (3,400 m2) offices,
1995 (R).

SE1

ST CHRISTOPHER HOUSE

80/112 Southwark Street,
596,500 ft2 (55,420 m2) offices,
8 shops, 1960.

The aggregate area of offices
and retail accommodation
including developments and
refurbishments owned in
the City, Midtown, West End
and Victoria, including the
properties listed above,
amounts to some 7.55m ft2
(701,410 m2) net of offices
and approximately 850,000 ft2
(78,970 m2) of retail
and restaurants.

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LAND SECURITIES PLC

Major Property Holdings

at 31 March 1999

ABERDEEN

Bon Accord Centre 255,000 ft2
(23,690 m2): 4 stores, 53 shops,
food court, 50,000 ft2 (4,650 m2)
leisure space, 29,000 ft2 (2,690 m2)
offices and car park, 1990.

BOOTLE

Strand Centre 400,000 ft2
(37,160 m2): Phases I and II:
3 stores, 129 shops, 2 public
houses and 7,400 ft2 (690 m2)
offices, 1989 (R) and 1998.

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Towns and cities where the
Group owns shop and office
properties valued at £10m or
above:

Note: ‘Shops’ in this section denotes
number of current tenancies, rather
than number of units originally
constructed. Stores, supermarkets,
banks and combined units are each
shown as one tenancy.

STRATFORD E15

Stratford Centre 290,000 ft2
(26,940 m2): 6 stores, 54 shops
and 27,800 ft2 (2,580 m2) of air
conditioned offices, 1976.

BALLYMENA
Tower Centre 175,000 ft2
(16,260 m2): 4 stores and
62 shops, 1981 and 1999.

BASILDON
72 shops, 1958/60, part 1985 (R)
and part 1988 (R).

BATH
7 shops, 1961.

(cid:2) NOTTING HILL GATE W11
93,400 ft2 (8,680 m2) offices, 53
shops, 2 stores and cinema, 1958.

(cid:2) BELFAST
10 shops, 1957, part 1984
and 1995.

(cid:2) KENSINGTON HIGH STREET
AND YOUNG STREET W8
33,000 ft2 (3,070 m2) retail store,
12,300 ft2 (1,140 m2) offices,
6 shops and club, 1920s and
part 1971.

FULHAM SW6

Empress State Building, Lillie Road:
350,000 ft2 (32,520 m2) offices,
1962.

(cid:2) BIRMINGHAM
Caxtongate Phase I: 15 shops and
15,000 ft2 (1,390 m2) offices,
1997.

(cid:5) BIRMINGHAM

Caxtongate Phase II: 7 shops and
residential.

BIRMINGHAM
Commercial Union House,
Corporation Street, Martineau
Square and Dale End: 222,500 ft2
(20,670 m2) offices, 1 store,
37 shops and car park, 1962 to
1971, 1975 and part 1993 (R).
Prospective development.

BIRMINGHAM
McLaren Building and Londonderry
House: 160,000 ft2 (14,860 m2)
offices, multi-storey car park, public
house and health club, 1970s.

BOLTON
20 shops, 1959.

Strand Centre, Bootle

Caxtongate Phase II,
Birmingham

BRISTOL
2 stores, 67 shops and 34,400 ft2
(3,200 m2) offices, 1957/1962.

CANTERBURY

Longmarket 50,000 ft2 (4,650 m2):
16 shops, 1 conservatory restaurant
and museum, 1992.

CANTERBURY
Clocktower: 5 shops and 14,300 ft2
(1,330 m2) offices, 1993.

CANTERBURY

Whitefriars/St. George’s Street.
1 store, 25 shops, restaurant,
15,000 ft2 (1,390 m2) offices,
showroom and public house,
1960s/1970s. Prospective
development.

CARDIFF

St David’s Centre 350,000 ft2
(32,520 m2): 60 shops, 1981 and
1991 (R). St David’s Link: 12 shops
and library, 1986.

CHELTENHAM

Regent Arcade: 4 shops and a share
in balance of Centre, 1984. 2 shops
and residential, 1997.

COVENTRY
46 shops, public house, 13,500 ft2
(1,250 m2) offices and hotel,
1955/1961 and 1991.

EALING

Broadway Centre (part) 36,500 ft2
(3,390 m2): 10 shops and
21,700 ft2 (2,020 m2) air
conditioned offices, 1984.

EAST KILBRIDE

Princes Mall 150,000 ft2
(13,940 m2): 2 stores, 38 shops,
public house and 10,200 ft2
(950 m2) offices, 1994 (R).

EAST KILBRIDE
The Olympia 350,000 ft2
(32,520 m2): 2 stores, 48 shops,
ice rink, 9 screen cinema, library,
restaurant, public house, night club,
food court and 7,400 ft2 (690 m2)
offices, 1989.

EXETER
2 stores, 66 shops and 27,800 ft2
(2,580 m2) offices, 1952/1964
and 1971.

(cid:2) HARLOW
47 shops, 1956, part 1988 (R).

HULL
48 shops, public house and
27,100 ft2 (2,520 m2) offices,
1952/1956.

IRVINE

Rivergate Centre 375,000 ft2
(34,840 m2): 1 superstore, 5 stores,
60 shops, public house, car park and
104,400 ft2 (9,700 m2) offices,
Phase I 1992 (R) and Phase II 1992.

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LAND SECURITIES PLC | Operating and Financial Review

Major Property Holdings

at 31 March 1999

(cid:3) YORK
14 shops, showrooms and offices
and Ryedale House 76,000 ft2
(7,060 m2) 1960s.

YORK

Coppergate Centre 160,000 ft2
(14,860 m2): 3 stores, 18 shops,
museum, 19 flats and car park,
1984.

KEIGHLEY

Airedale Centre 250,000 ft2
(23,230 m2): 77 shops, 5 kiosks,
mall café and car park, 1988 (R).

KILMARNOCK

Burns Centre, 3 Phases 183,000 ft2
(17,000 m2): 3 stores, 36 shops,
public house and 18,900 ft2
(1,760 m2) offices, 1975/1979
and 1991 (R).

LEEDS

White Rose Shopping Centre
650,000 ft2 (60,390 m2): 2 anchor
stores, 11 major space units,
71 shops, restaurant and food
court, 1997.

LIVERPOOL

21 shops and 4,000 ft2 (370 m2)
offices, 1950s and 1999.

LIVERPOOL

(cid:2) (cid:6)
St Johns Centre 360,000 ft2
(33,440 m2): 4 stores, 93 shops,
2 public houses, retail market,
food court, hotel, car park and
Beacon, 1989 (R).

LIVINGSTON

(cid:2) (cid:6)
Almondvale Centre 520,000 ft2
(48,310 m2): Phases I and II: 7
stores, 106 shops, public house,
mall café and car parks, Phase I
1989 and 1996 (R), Phase II 1996.

(cid:2) (cid:6) MAGHULL
Central Square and Westway
61,000 ft2 (5,670 m2): 1 store
and 42 shops, 1963/1969.

(cid:2) (cid:6) NEWBURY
Kennet Centre 240,000 ft2
(22,300 m2): 2 stores, 55 shops,
mall café, car park and 8,300 ft2
(770 m2) offices, part 1972.
Refurbished and extended 1985/89.

(cid:2) (cid:6) NEWTOWNARDS
Ards Centre 285,000 ft2
(26,480 m2): 3 stores, 42 shops,
3 kiosks, food court, 10 unit
speciality mall, petrol filling station,
car park and drive through
restaurant, 1976. Refurbished
and extended 1995.

(cid:2) NOTTINGHAM
Alan House: 4 shops and 21,000 ft2
(1,950 m2) offices, 1985 (R).

PLYMOUTH
1 store, 49 shops, 1952/1965.

(cid:2) READING
Station Hill: 86,400 ft2 (8,030 m2)
offices and 13 shops, 1966. Hogg
Robinson House: 40,000 ft2
(3,720 m2) offices, 1979.

SUNDERLAND

(cid:5) (cid:6)
The Bridges 250,000 ft2
(23,230 m2): Phase I: 3 stores,
81 shops and mall café, 1969 and
1988 (R): Phase II 265,000 ft2
(24,620 m2): 2 stores, 28 shops
and car park.

(cid:2) (cid:4) UXBRIDGE ONE
142,500 ft2 (13,240 m2) offices and
twin cinemas, 1990.

(cid:2) (cid:6) WALLSEND
The Forum 103,000 ft2 (9,570 m2):
1 store and 45 shops, 1966 and
1996 (R).

(cid:2) WALSALL
13 shops, 1970s and 1987.

(cid:6) WALSALL

Saddlers Centre 185,000 ft2
(17,190 m2): 2 stores, 38 shops,
4 kiosks and car park, 1980 and
1990 (R).

St David’s Centre, Cardiff

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LAND SECURITIES PLC

Major Property Holdings

at 31 March 1999

Ings Road, Wakefield

(cid:2) LIVINGSTON
Almondvale: 103,300 ft2
(9,600 m2) 4 retail warehouses
and ice rink (under conversion to
retail), 1987.

(cid:2) MANCHESTER
White City Retail Park: 192,000 ft2
(17,840 m2) 11 retail warehouses,
2 restaurants and ten pin bowl,
1990.

(cid:2) PLYMOUTH
Friary Centre, Exeter Street:
78,700 ft2 (7,310 m2)
2 retail warehouses, 1990.

(cid:2) SLOUGH RETAIL PARK
Bath Road: 154,200 ft2 (14,330 m2)
6 retail warehouses, 1989 and 1998.

(cid:2) STAINES
The Causeway: 40,900 ft2 (3,800 m2)
2 retail warehouses, 1995.

(cid:2) STOCKTON-ON-TEES
143,800 ft2 (13,360 m2) food
superstore 1970 (R) and 4 retail
warehouses 1986/87.

(cid:2) WAKEFIELD
Ings Road: 100,000 ft2 (9,290 m2)
food superstore and 2 retail
warehouses, 1988, extended
1997/99.

(cid:2) WEST THURROCK
Lakeside Retail Park: 310,700 ft2
(28,870 m2) 17 retail warehouses
and fast food restaurant, 1988, 1989
and 1997. Extension planned.

Retail warehouse and food
superstore properties:

(cid:2) BEXHILL-ON-SEA
Ravenside Retail and Leisure Park:
222,350 ft2 (20,660 m2) 9 retail
warehouses, food superstore, fast
food restaurant, ten pin bowl and
swimming pool, 1989.

(cid:2) BIRMINGHAM
Great Barr: 83,500 ft2 (7,760 m2)
hypermarket, 1998.

(cid:2) BLACKPOOL RETAIL PARK
121,500 ft2 (11,290 m2) 9 retail
warehouses, 1993, 1995 and 1996.
Extension planned.

(cid:2) BOLTON
Manchester Road: 82,100 ft2
(7,630 m2) 6 retail warehouses,
1985, 1989 and 1997.
(cid:2) BRISTOL
Longwell Green: 73,000 ft2
(6,780 m2) 2 retail warehouses,
1985/86.

(cid:2) CHADWELL HEATH
(Near Romford): 76,600 ft2
(7,120 m2) 3 retail warehouses,
1988. 15,000 ft2 (1,390 m2):
Extension planned.

(cid:2) CHESTERFIELD
Ravenside Retail Park, Markham
Road: 83,200 ft2 (7,730 m2) 5 retail
warehouses, 1982 and 1997.

(cid:2) DERBY
Meteor Centre: 186,080 ft2
(17,290 m2) 11 retail warehouses
fast food restaurant and public
house, 1988 and 1994.

(cid:2) DERBY
Wyvern Centre: 121,400 ft2
(11,280 m2) 6 retail warehouses
and fast food restaurant, 1990
and 1996.

(cid:2) DUNDEE
Kingsway Retail Park: 186,800 ft2
(17,350 m2) 7 retail warehouses
and fast food restaurant,
1985/87/88/94. Major extension
planned.

(cid:2) EDMONTON
Ravenside Retail Park: 129,500 ft2
(12,030 m2) 4 retail warehouses
and fast food restaurant, 1988.

(cid:2) ERDINGTON
Ravenside Retail Park, Kingsbury
Road: 154,000 ft2 (14,310 m2)
8 retail warehouses, 1987 and 1989.
Extension planned.

GATESHEAD
Team Valley, Retail World Retail Park:
371,300 ft2 (34,490 m2)
19 retail warehouses and fast food
restaurant, 1987.

(cid:2) GLOUCESTER RETAIL PARK
Eastern Avenue: 112,500 ft2
(10,450 m2) 4 retail warehouses,
1989. Extension planned.

(cid:2) HATFIELD
Oldings Corner: 64,600 ft2
(6,000 m2) 3 retail warehouses, 1988.

(cid:2) HIGH WYCOMBE
London Road: 47,000 ft2
(4,370 m2) 2 retail warehouses, 1988.

(cid:2) HULL
Priory Way: 95,300 ft2 (8,850 m2)
food superstore and
retail warehouse, 1984.

(cid:2) KEIGHLEY
Cavendish Street: 59,700 ft2
(5,550 m2) food superstore, 1985.

(cid:2) LIVERPOOL
Racecourse Retail Park, Aintree:
269,700 ft2 (25,060 m2) 15 retail
warehouses and fast food restaurant,
1986, 1988 and 1990.

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LAND SECURITIES PLC | Operating and Financial Review

Major Property Holdings

at 31 March 1999

(cid:2) HESTON
(Near Heathrow) The Harlequin
Business Centre: 67,600 ft2
(6,280 m2) two storey offices,
1989.

(cid:2) HINCKLEY
Dodwells Road: 301,700 ft2
(28,030 m2), 1989.

(cid:2) HUNTINGDON
146,700 ft2 (13,630 m2) on
Ermine Business Park, 1989 and
1990 and 72,600 ft2 (6,740 m2)
on Stukeley Meadows Industrial
Estate, 1988.

(cid:2) SUNBURY CROSS
Hanworth Road (includes
Interchange West): 316,000 ft2
(29,360 m2), 1970 and 1976.

(cid:2) TAMWORTH
Centurion Park: 262,900 ft2
(24,420 m2) high bay
warehousing 1996 and 1999.

(cid:2) WELWYN GARDEN CITY
Bridge Road: 183,700 ft2
(17,070 m2), 1955/61/76 and
8 acres redevelopment site at
Bessemer Road South.

(cid:2) WEST THURROCK
Motherwell Way: 312,900 ft2
(29,070 m2), 1973, 1975 and
1979 and trailer park of 1.28
acres. Lakerise Industrial Estate:
58,600 ft2 (5,440 m2), 1983.

(cid:2) WEYBRIDGE
316,700 ft2 (29,420 m2) on
Brooklands Industrial Estate, 1984
and extended 1989.

In addition to the major holdings
the portfolio includes:

Shops and/or
office properties
at other locations in a number of
towns listed and in the centres of
Aylesbury, Barry, Beaconsfield,
Birmingham, Blackpool, Boston,
Bournemouth, Brentwood,
Bromley, Bury St Edmunds,
Cambridge, Chelmsford, Chester,
Chippenham, Cirencester,
Colchester, Croydon, Durham,
Ealing, Epping, Epsom, Erdington,
Falkirk, Fleet, Glasgow suburbs,
Grantham, Henley on Thames,
Hereford, Horsham, Huddersfield,
Ipswich, Kettering, Kings Heath,
Kingston upon Thames, Leeds,
Leicester, Lincoln, London
suburbs, Maidstone, Manchester,
Marlow, Melton Mowbray,
Milngavie, Newcastle-under-Lyme,
Newcastle upon Tyne, Newton
Aycliffe, Northampton, Norwich,
Nuneaton, Perth, Peterborough,
Portsmouth, Redhill, Reigate,
Rochdale, Rotherham, Rugby,
St Albans, Salisbury, Shrewsbury,
Southampton, South Shields,
Stirling, Sunderland, Swansea,
Swindon, Tamworth, Torquay,
Tunbridge Wells, Wakefield,
Watford, Wokingham, Workington
and Wrexham.

Retail warehouse properties
in Andover, Bletchley, Bradford,
Cardiff, Christchurch, Dewsbury,
Doncaster, Fareham, Frimley,
Halifax, Hendon, Manchester,
Oldham, Peterborough, Poole,
Rotherham, Sheffield, Stoke on
Trent, Swansea, Wolverhampton,
Wrexham and York.

Warehouse and
industrial properties
in Abingdon, Barking,
Basingstoke, Bourne End,
Bracknell, Bradford, Braintree,
Caldicot, Cardiff, Chadwell Heath,
Chesham, Chester, Colnbrook (2),
Coulsdon (2), Coventry,
Dunstable, Eastleigh, Enfield,
Glasgow (several estates), Hayes,
High Wycombe (2), Leeds,
Leighton Buzzard, London (Park
Royal), Manchester, Northampton,
Peterborough, Rochdale, Sheffield,
Slough (2), Swanley, Swindon,
Walsall and Wimbledon.

Outside the City, West End and
Victoria, the Group has holdings
in virtually all the major cities and
towns throughout the United
Kingdom which, including
developments and refurbishments,
total 6.9 m ft2 (641,030 m2) of
retail space, 1.84 m ft2
(170,940 m2) of office space,
7.7m ft2 (715,350 m2) of
warehouse and industrial space
and 4.9m ft2 (455,220 m2) of
out of town retail and food
superstore space.

The whole portfolio contains in
excess of 2,800 shops including
117 supermarkets or stores, each
with an area in excess of
10,000 ft2 (930 m2).

Pump Lane, Hayes

Warehouse and industrial
properties:

(cid:2) (cid:5) BANBURY
Middleton Road: 338,900 ft2
(31,480 m2) high bay distribution
warehousing, 1995 and 1998.
Construction in progress for
additional 65,000 ft2 (6,040 m2).

(cid:2) BLACKPOOL
Squires Gate Industrial Estate:
1,153,900 ft2 (107,200 m2), 1940s.

(cid:2) CHANDLERS FORD
(Near Southampton) School Lane:
232,000 ft2 (21,550 m2),
1985/88/89.

(cid:2) FRIMLEY
(Near Camberley): 206,700 ft2
(19,200 m2) on Albany Park,
1982/84.

(cid:2) HATFIELD
Welham Green: 337,000 ft2
(31,310 m2), 1986 and extended
1988.

(cid:2) HESTON
(Near Heathrow) Heston Centre
and Spitfire Trading Estate:
309,200 ft2 (28,730 m2),
1977/82/84.

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Investor Information

Analyses of Equity Shareholdings
at 31 March 1999

BY SHAREHOLDER

Individuals
Nominee Companies
Banks
Insurance Companies
Pension Funds
Other Limited Companies
Other Corporate Bodies

Shareholders

No.

Shareholdings

No.

23,767
12,047
233
55
27
1,489
946

61.63
31.24
0.61
0.14
0.07
3.86
2.45

29,476,050
378,907,638
36,050,546
70,173,170
24,257,184
8,126,661
7,345,705

5.32
68.35
6.50
12.66
4.38
1.47
1.32

38,564

100.00

554,336,954

100.00

BY SIZE OF HOLDING

up to 500
501 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 50,000
50,001 to 100,000
100,001 to 500,000
500,001 to 1,000,000
1,000,001 and above

Shareholders

No.

Shareholdings

No.

12,480
11,336
12,138
981
883
240
339
78
89

32.36
29.41
31.47
2.54
2.29
0.62
0.88
0.20
0.23

3,776,767
8,647,986
24,710,405
7,067,076
19,986,423
18,034,016
77,854,561
56,300,287
337,959,433

0.68
1.56
4.46
1.27
3.61
3.25
14.04
10.16
60.97

38,564

100.00

554,336,954

100.00

REGISTRAR
Enquiries concerning holdings of ordinary shares, debentures or loan
stocks in Land Securities PLC should be addressed to: Lloyds TSB
Registrars, The Causeway, Worthing, West Sussex BN99 6DA. Telephone:
01903 502541.
Holders of the Company’s ordinary shares, debentures and loan stocks
should notify the Registrar promptly of any change of their address.

LOW COST SHARE DEALING FACILITY
The Company operates with Cazenove & Co. a postal share dealing facil-
ity which provides shareholders with a simple, low cost way of buying
and selling Land Securities PLC ordinary shares. For further information,
or dealing forms, contact: Cazenove & Co., 12 Tokenhouse Yard, London
EC2R 7AN. Telephone: 0171 606 1768.

PERSONAL EQUITY PLANS (PEPs)
The Company’s General and Single Company PEPs, which were previ-
ously managed by Bradford & Bingley (PEPs) Limited, were transferred
to The Share Centre on 6 April 1999. With effect from that date, no new
PEPs may be opened, although existing PEPs can continue for at least the
next five years. For further information, contact The Share Centre, St
Peter’s House, Market Place, Tring, Herts HP23 4JG. Telephone: 01442
890844.

CORPORATE INDIVIDUAL SAVINGS ACCOUNTS (ISAs)
The Company has arranged for a Corporate ISA to be managed by Lloyds
TSB Registrars, who can be contacted at The Causeway, Worthing, West
Sussex BN99 6UY. Telephone: 0870 24 24 244

CAPITAL GAINS TAX
For the purpose of capital gains tax, the price of the Company’s ordinary
shares at 31 March 1982, adjusted for the capitalisation issue in
November 1983, was 205p.

SHARE PRICE INFORMATION
The latest information on the Land Securities PLC share price is available
on the Financial Times Cityline Service. Telephone: 0906 0033133
(calls charged at 60p per minute).

REGISTERED OFFICE
5 Strand, London WC2N 5AF
Registered in England and Wales:
No.551412

OFFICES
5 Strand, London WC2N 5AF
(Telephone: 0171 413 9000)
and at Birmingham, Glasgow,
Kingston and Leeds
e-mail: landsec@landsec.co.uk

WEBSITE
www.landsec.co.uk

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