Gladstone Land Corporation Annual Report 2000

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FY2000 Annual Report · Gladstone Land Corporation

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Report and Financial Statements 31 March 2000

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Contents

1
2
4
6

8
10
18
20
23

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
Hotels, Leisure and Residential
Retail Warehouses and
Food Superstores
Warehouses and Industrial
Financial Review

Environment
Corporate Governance
Remuneration Committee
Directors’ Report
Directors and Advisers
Senior Management
Directors’ Responsibilities and 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
Glossary of Terms
Investor Information

24
26
28
31
32
34
36
38
39
40
41
42
43
44
45
46
59
60
64
(Inside Back Cover)

FINANCIAL CALENDAR

2000
24 May
5 June
9 June
11 July
24 July
November Announcement of interim results (unaudited)

Preliminary Announcement
Ex-dividend date
Registration qualifying date for final dividend
Annual General Meeting
Final dividend payable

2001
January

Interim dividend payable

Land Sec to pdf 6/14/00 3:31 PM Page 1

LAND SECURITIES

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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 anticipating and responding
to our customers’ changing property requirements.

Land Sec to pdf 6/14/00 3:31 PM Page 2

LAND SECURITIES

Financial Highlights

NET RENTAL INCOME

*REVENUE PROFIT (PRE-TAX)

PRE-TAX PROFIT

EARNINGS PER SHARE

*ADJUSTED EARNINGS PER SHARE

DIVIDENDS PER SHARE

DIVIDEND COVER (times)

*ADJUSTED DIVIDEND COVER (times)

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31 March
2000

31 March
1999

Change %

Ten Year
Compound
Growth %

£457.2m

£427.5m

£301.7m

£292.7m

+6.9

+3.1

£327.7m

£293.3m

+11.7

45.44p

40.86p

31.00p

1.52

1.37

39.21p

39.11p

29.50p

1.31

+15.9

+4.5

+5.1

+5.8

+5.6

+5.9

+5.2

+6.2

DILUTED NET ASSETS PER SHARE

1090p

975p

+11.8

+2.3

£7,453.7m £6,910.5m

£1,556.3m £1,569.3m

£5,781.8m £5,470.4m

26.9%

24.5%

3.11

28.7%

19.8%

3.03

15.0%

10.4%

PROPERTIES

BORROWINGS

EQUITY SHAREHOLDERS’ FUNDS

GEARING

†GEARING (net)

†INTEREST COVER (times)

†RETURN ON SHAREHOLDERS’ EQUITY

*Excludes results of property sales.
†See glossary (page 64).

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REVENUE PROFIT (PRE-TAX)

£m

400

300

200

100

238.7

235.7

292.7

301.7

265.9

ADJUSTED EARNINGS PER SHARE PENCE

33.92

33.17

37.07

39.11

40.86

DIVIDENDS PER SHARE

PENCE

26.00

27.00

28.00

29.50

31.00

DILUTED NET ASSETS PER SHARE PENCE

1200

900

600

300

910

975

1090

774

688

LAND SECURITIES

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Land Sec to pdf 6/14/00 3:31 PM Page 4

LAND SECURITIES

Valuation

The portfolio was valued by Knight Frank at almost £7.5bn* at 31 March 2000. After adjusting for sales,
acquisitions and other expenditure, the value increased by 6.5%. A detailed breakdown by sector, including
comprehensive analyses of the Group’s valuation and rental income, is shown below and on the facing page.

The direct property market has continued to perform well, with a modest overall improvement in yields and
evidence of rental growth in most sectors.Within the portfolio significant rental growth, against a background
of reducing supply, produced good results in the West End and Victoria areas, where there has been increased
demand for space from e-commerce and media businesses as well as from traditional occupiers.The City and
Midtown markets, although showing a lower rate of growth, have seen strengthening rental performance in
the last few months of the period under review.

Well located shopping centres have seen valuation increases ahead of inflation. However, pressure on trading
margins is leading to restructuring by a number of major retailers and the valuation reflects a weaker
performance in some high streets, smaller towns and secondary locations.

Retail warehouses performed strongly for the third time in the last four years, with continuing rental growth
and increased investor demand. The industrial and warehouse portfolio has benefited from a favourable shift
in yields, with investors favouring multi-let estates, particularly in the South East.

The further increase in Stamp Duty in the recent Budget is reflected in the valuation.

After excluding those properties in the schedule of developments and refurbishments on page 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 2000 was almost £7bn. At the same date, the annual rent roll,
net of ground rents and excluding the same properties, was £456.2m, 6.5% of this figure.

Portfolio valuation
at 31 March 2000

O F F I C E S

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

C I T Y A N D M I D TOW 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 L O N D O N S H O P S

OT H E R I N - TOW 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 TO R E S

PA R K S

OT 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 OT E L S , L E I S U R E A N D R E S I D E N T I A L

£m

1,618.3
1,301.2
165.2

1,370.6
623.7
771.9

675.2
227.8

424.0

275.8

Total

21.7
17.5
2.2

18.4
8.4
10.3

9.1
3.0

5.7

3.7

TOTA L VA L UAT I O N

7,453.7

100.0

*The portfolio valuation figures include a one third apportionment of the valuation attributed to properties owned by the
Birmingham Alliance limited partnerships.

Analysis of
valuation surplus

10.3
4.1
1.3

4.6
7.7
4.9

7.5
7.8

6.9

6.5

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LAND SECURITIES

RENTAL INCOME BY TYPE Total £479.9m

PORTFOLIO VALUATION BY TYPE Total £7,453.7m

3.2%

6.6%

10.6%

42.1%

37.5%

3.7%

5.7%

12.1%

41.4%

37.1%

Year ended 31 March 2000

At 31 March 2000

PORTFOLIO VALUATION BY LOCATION

Total £7,453.7m

KEY

Offices

Shops and
shopping centres

Retail warehouses and
food superstores

Warehouses and
industrial

Hotels, leisure
and residential

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NORTH, N.W.,
YORKSHIRE & HUMBERSIDE
£989.4m | 13.3%

SCOTLAND & N. IRELAND
£641.3m | 8.6%
E. & W. MIDLANDS
& E. ANGLIA
£553.4m | 7.4%
WALES & SOUTHWEST
£447.9m | 6.0%

WEST END & VICTORIA

£2,404.4m | 32.3%

CITY & MIDTOWN
£1,348.0m | 18.1%

GREATER LONDON
& HOME COUNTIES
£1,069.3m | 14.3%

At 31 March 2000

% PORTFOLIO BY VALUE

£0 - 10m

10.6

£10 - 25m

14.3

£25 - 50m

22.7

over £50m

52.4

No. of properties

225

At 31 March 2000

% YIELD ON PRESENT INCOME

9
3 9
9

4
8

0
6

2
8

3
8

1
8

8
7

8
6

6
6

5
6

90 91 92 93 94 95 96 97 98 99 00

At 31 March

OFFICES

SHOPS AND SHOPPING
CENTRES

RETAIL WAREHOUSES AND
FOOD SUPERSTORES

WAREHOUSES AND
INDUSTRIAL

HOTELS, LEISURE AND
RESIDENTIAL

By sector at 31 March 2000

6.7

6.4

5.9

7.8

6.1

Land Sec to pdf 6/14/00 3:31 PM Page 6

LAND SECURITIES

Chairman’s Statement

Reflection

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Land Sec to pdf 6/14/00 3:31 PM Page 7

LAND SECURITIES

We are accelerating the sales programme and focusing our substantial
development programme on areas where we see the greatest opportunities
for long term growth. We must ensure that we satisfy occupiers’ future needs
in this rapidly changing environment.

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I am pleased to report a good all-round performance.
Land Securities increased pre-tax profit by 11.7% to
£327.7m, which includes £26.0m from property
sales. Diluted net assets per share increased by 115p
to 1090p per share following a valuation uplift of
6.5%.The Group invested £370.2m on developments
and acquisitions, £249.8m on buying back shares
and has sold £307.0m of property. After taking into
account the current strength of the Company, the
Board recommends a final dividend of 22.75p per
share, an increase of 5.1% over that for the previous
year, making a total distribution for the year of 31p,
an increase of 5.1%. The dividends for the year,
paid and proposed, will be covered 1.37 times after
excluding the effect of property sales.

When we reported at this time last year, the economy
was beginning to recover from the problems that
had affected international capital markets during
the previous autumn. That recovery gathered pace
and has resulted in a much stronger economic
performance in the UK than most commentators had
anticipated. The direct commercial property market
benefited, with strong rental growth in several
sectors, including West End offices, retail warehouses
and some prime shopping locations. Prospects for
economic growth in the UK this year are also good
and well located, well specified property should
continue to benefit from this underlying strength.
Demand for central London offices remains strong
and pre-lettings of our retail developments are
encouraging. Easy accessibility
international
pricing comparison is increasing competition and
putting further pressure on retailers’ margins;
nonetheless consumer confidence remains strong
and those retailers who are adapting to meet the
requirements of customers continue to thrive and to
seek additional space.

New technology
is providing not only huge
challenges but also great opportunities; there will
continue to be strong demand for property of
the
the required quality and specification
right
that we
satisfy occupiers’
future needs in this rapidly
changing environment. Our development and sales
programmes are designed to position the Group to
take advantage of these new opportunities.

location and we must ensure

The last year has seen dramatic outperformance by
the new technology stocks at the cost of the so-
called ‘old economy’ sectors. Traditional methods
of valuation, based on cash flow, earnings and
underlying asset values, appear to have been largely
ignored in assessing the growth potential of many
businesses in the new technology sectors. Quoted
property shares, along with many others, suffered as
investors took cash out of the traditional sectors
to reinvest in perceived growth stocks. The full
impact of e-commerce is not yet known and this has
created uncertainty and volatility. We have been
examining closely the effect of e-commerce on
property use and are positioning ourselves to
meet the new challenges. We are accelerating the
sales programme and focusing our substantial
development programme on areas where we see the
greatest opportunities for long term growth.

The weakness in our share price presented us
with the opportunity to buy back shares on an
advantageous basis for continuing shareholders.

During the year we have carried out a thorough
review of our business, aimed at improving the creation
of long term and sustainable shareholder value, and
are proposing a number of significant changes
which are outlined by Ian Henderson in his review.

its

I am sad to report the death of Richard Caine, who,
as many shareholders will recall, served the Group
with great distinction as a non-executive director
formative years; he was an
throughout
exceptional man. Following John Hull’s retirement
at the Annual General Meeting last July, I could not
let this opportunity pass without recording my
thanks for his great contribution to the Group.
He served the Group well over a period of more
than 20 years and we wish John and his wife a long
and happy retirement. I am delighted to welcome
Sir Win Bischoff as a non-executive director. Sir Win
is chairman of Citigroup Europe and brings wide
and varied experience to the Board. I would also like
to thank all of the staff for their dedication and
commitment to the Group during the last year.

Looking to the future, the share buy-back and sales
increase
programmes, which are designed
shareholder value, will have an immediate impact
on profitability. Changing markets are presenting
the Group with new opportunities to exploit its
commercial and financial strengths.The prospects are
encouraging and the Group is in good hands under
Ian Henderson’s leadership.

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

Land Sec to pdf 6/14/00 3:31 PM Page 8

LAND SECURITIES | Operating and Financial Review

Chief Executive’s

Review

In my review last year, I set out our strategy of
creating value
the
development of quality assets, focusing particularly
on the regeneration of town and city centres.

shareholders

through

for

In pursuing that strategy during the last twelve
months we have:

•

started on site in Canterbury and Birmingham
and our major projects in Sunderland and
Livingston are nearing completion.

submitted three major planning applications for
schemes in the City, Midtown and Victoria areas
of London and have several other significant
schemes under review.

increased our development programme to £1.65bn.

spent £256.1m on our development activity
during the year and £114.1m on property
acquisitions, much of which has been purchased
with development potential in mind.

sold £307.0m of property that no longer suits
our portfolio requirements, reducing the number
of properties in the portfolio to 379.

As a result of the significant falls in property share
prices, we were able to create additional value
for shareholders by buying back our shares at a
substantial discount to net asset value and on terms
which benefited earnings. Between 18 January and
the end of March we bought back almost 36 million
shares at an average price of 689p, which, based on a
diluted net asset value of 1090p at 31 March 2000,

represented an immediate gain of 58p on each £1
invested, or 49p per £1 invested if fair value debt
adjustments, net of taxation, are taken into account.
This buy-back programme added 18p per share to
diluted net assets per share at 31 March 2000.
We have also received shareholder authority to buy
back up to a further 14.9% of shares in issue which
we shall only do if it is in the best interests of
shareholders. We have the balance sheet strength to
increase shareholder value by this route while
retaining the flexibility to pursue attractive and
longer term property initiatives.

than

for shareholders

In taking the business forward, we continue to
believe that the development process will add more
value
the purchase of
completed investments which offer limited scope for
adding value through active management. In central
London our development proposals will create larger
office buildings with the size of floor plates required
by occupiers. The retail sector will continue to
gravitate to dominant locations and, through our
development programme, we seek
to provide
principal shopping centres in major towns and
cities. The challenges presented by the Internet
make it even more important to create accessible,
lively and entertaining destinations for shoppers.
We will review actual and projected performance
and sell completed developments where
this
provides the best returns for shareholders. Where
we consider it appropriate, we will work with
partners, as we are doing currently in Birmingham
and Livingston.

Under existing arrangements, the Group’s properties
have been managed by teams structured on a

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geographical basis but,
following our strategic
review, we propose to restructure our activities into
two clearly defined functions: asset management and
development. Each asset or project will be subject
to even more stringent analysis. Target returns will
be based on our assessed weighted average cost
of capital, adjusted for project-specific risk factors.
To put this in context, compared with a weighted
average cost of capital assessed at 9.2%, the total
property return for the year was 13.6% and, over a
three-year period, compared with a weighted average
cost of capital of 10.4%, the average portfolio return
has been 15.1%.As part of the implementation of the
changes in the day-to-day running of the business,
we are evaluating further benchmarks against which
to compare performance. We are reviewing our
capital structure to establish whether there are more
efficient ways of holding and managing property
which will boost
returns while
maintaining our financial and commercial flexibility.

shareholder

for

strategy

In order to help to implement the changes in
the Group’s structure and business approach,
we have appointed, with effect from 1 September
2000, Peter Walicknowski, as director with special
responsibilities
business
development, to work closely with me in allocating
funds to the major business areas in which the
Group should invest in future. He is currently chief
executive of Lend Lease’s European operations. We
are also in the process of making a new senior
executive appointment
the asset
management function.

to head up

and

We are undertaking extensive research into the
identify
effects of e-commerce

in order

Land Sec to pdf 6/14/00 3:41 PM Page 9

Operating and Financial Review | LAND SECURITIES

We have the balance sheet strength to take advantage of new opportunities
and to meet the challenges of new technology. The active management of
properties that satisfy customers’ needs and the provision of high quality
developments, designed to meet their future requirements, will provide
attractive and increasing returns for shareholders.

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opportunities. In relation to retail property, many
of
the
the potential economic benefits from
exploitation of new technology depend on the
successful solution of problems surrounding the
distribution of products to the customer. We have
formed a working party which is consulting with
many of our key tenants to find ways of satisfying
their future requirements. We are also evaluating
propositions for the provision of the latest IT wiring
to help occupiers of our major
facilities
multi-occupied offices and shopping centres to take
greater advantage of the developing technology.

There have been some suggestions that recent share
price weakness in the quoted property sector may be
due in part to the level of disclosure by property
companies. Over the last ten years we have extended
the range and detail of information that we have
included in our Annual Report, while ensuring that
such disclosure does not and will not damage
shareholder returns by putting us at a competitive
disadvantage in the marketplace. At the group and
sectoral levels we provide information on the extent
the reversionary potential and average
of voids,
outstanding lease lengths but do not consider it to be
in the best interests of shareholders to disclose rental
or reversionary information at property level, since
this could affect our ability to agree optimum terms
for sales, renewals or rent reviews. The potential
effect of complex financing covenants on stated net
asset values has also been referred to as a reason for
share price discounts but our borrowings are
disclosed and most are publicly quoted. In a further
move to update shareholders with the performance
of the portfolio, we will be commissioning half-
yearly valuations, starting this September.

The recent publication of the Accounting Standards
Board’s Discussion Paper on Accounting for Leases,
proposing that leases should be recorded on lessees’
balance sheets, is likely to result in a preference for
shorter leases. In addition, we expect the pressures of
new technology to make it increasingly difficult for
customers to anticipate occupational requirements.
We have for some time been offering tenants flexible
lease terms and are evaluating the effects of
providing an even wider choice. Meeting the needs
of our customers will provide more opportunities
for active management. A number of organisations
are seeking ways to reduce their direct investment in
property and we are having discussions with several
parties to help address their future requirements.
Among the propositions that we are considering are
the London Underground Property Partnership
project and the MoD repository proposal at Hayes,
Middlesex, where, in both cases, we are members of
consortia that have been short-listed.

We are hopeful that London will benefit from
the policies of its new mayor. The capital city
makes a huge contribution to the national economy
and has continued to perform strongly outside the
Economic & Monetary Union. London’s success
depends on improving its transport systems and
maintaining an attractive environment for business,
free from bureaucratic and costly regulation. In order
to assist the property industry in providing suitable
space for business, planning policies need to be
applied consistently and the process to be free from
undue delays.

We have the balance sheet strength to take advantage
of new opportunities and to meet the challenges
of new technology. The active management of
properties that satisfy customers’ needs and the
provision of high quality developments, designed
to meet their future requirements, will provide
attractive and increasing returns for shareholders.

The Chairman referred to the current strength of
the direct property market compared with the
disappointing performance of the quoted sector.
The tax disadvantages of a quoted property invest-
ment company in competition with direct property
ownership have become
increasingly apparent
following the abolition of advance corporation tax.
Also on the subject of taxation, the latest increase in
stamp duty, the fourth in three years, has done further
harm to property as an asset class in comparison
with bonds and equities, and demonstrates a lack of
awareness of the importance of a healthy commercial
In a low
property sector to the UK economy.
inflationary environment,
additional costs of
property transactions adversely affect liquidity.

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

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LAND SECURITIES | Operating and Financial Review

The Group’s Developments

During the year under review we completed some 75,750m2 (815,400ft2) of the development programme.
The most significant projects were Lacon and Warner Houses, Theobald’s Road WC1 which produced a
development surplus of £44.9m over the development period and an income return of almost 9% on total
development cost. Developments completed during the year produced a total surplus of £77.7m and
developments currently in progress have so far shown a £29.7m surplus.

Last year we reported a development programme with an estimated capital cost of £1.05bn exclusive of
interest and the book value of those properties in our portfolio prior to assembling the programme. This
included £40m in respect of projects completed in the year ended 31 March 1999. After excluding those
projects, the estimated capital cost of the programme set out on the schedule opposite is approximately
£1.65bn of which £128m relates to the completed projects listed in the first section of the schedule and
almost £350m to those in progress listed in the second section.The balance of £1.17bn relates to expenditure
on the proposed developments. The outstanding expenditure of some £1.3bn required to complete the
programme will be spread over a number of years.

Including our share of joint developments, the programme set out in the schedule opposite would
provide approximately 640,500m2 (6.89m ft2) of which 134,770m2 (1.45m ft2) is in progress and
429,980m2 (4.63m ft2) is proposed.The most significant additional projects are 30 Gresham Street EC2 and
New Fetter Lane EC4.

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19,790m2 ( 213,000ft2 ) of shopping centre refurbishment

If all of the wholly owned schemes on page 11 go ahead they would produce over
• 197,440m2 (2,125,200ft2 ) of new shopping development
•
• 186,090m2 (2,003,100ft2 ) of central London offices
•
•
•

21,080m2 ( 226,900ft2 ) of leisure
60,900m2 ( 655,500ft2 ) of retail warehouses
60,320m2 ( 649,300ft2 ) of warehouses and industrial

In addition we have a one third interest in the Birmingham Alliance projects of 248,970m2 (2.68m ft2) and
a half interest in the 23,780m2 (256,000ft2) Designer Outlet Shopping and Leisure Centre in Livingston.

Many of the schemes are at the feasibility stage and will only proceed when detailed design work and site
assembly are complete, consents obtained and viability confirmed.

The planned conversion of the 52,030m2 (560,000ft2) Empress State Building has been omitted from the
programme as we are reviewing alternative options to maximise the potential returns to shareholders,
including letting the property on a ground lease to a hotel operator who will carry out the conversion works.

The proposed 17,990m2 (193,600ft2) leisure-led mixed-use scheme at Hungate, York, due to be carried
out in joint ownership with Evans of Leeds, has also been omitted as we are investigating the viability of
alternative development opportunities.

We are currently short-listed for several other potential schemes, the most significant of which are a mixed-
use scheme at the Elephant & Castle SE1 and major shopping developments in Belfast and Bristol.

Land Sec to pdf 6/14/00 3:42 PM Page 11

Operating and Financial Review | LAND SECURITIES

D E V E L O P M E N T S C O M P L E T E D D U R I N G T H E Y E A R E N D E D 3 1 M A R C H 2 0 0 0

2 T E M P L E AV E N U E E C 4

2,540m2 (27,300ft2) air conditioned office
refurbishment with 920m2 (9,900ft2) leisure.
Completed July 1999. £9.5m.

S T A L B A N S H O U S E S W 1

4,270m2 (46,000ft2) air conditioned office
refurbishment.
Completed February 2000. £5.7m.

(cid:2) WA R N E R H O U S E W C 1
( F O R M E R LY 1 T H E O B A L D ’ S C O U RT )
11,520m2 (124,000ft2) air conditioned offices.
Completed July 1999. £33.0m.

DEVELOPMENTS IN PROGRESS AT 31 MARCH 2000

L AC O N H O U S E W C 1

( F O R M E R LY 2 T H E O B A L D ’ S C O U RT )
18,910m2 (203,500ft2) air conditioned offices with
930m2 (10,000ft2) leisure.
Completed November 1999. £51.7m.

6 / 1 7 TOT T E N H A M C O U RT ROA D W 1

5,710m2 (61,500ft2) retail, 210m2 (2,300ft2) offices and
nine residential units. Residential element sold April
1999. Phased completion to December 1999. £8.6m.

(cid:2) C A X TO N G AT E P H A S E I I , N E W S T R E E T,
B I R M I N G H A M
3,720m2 (40,000ft2) retail and residential
accommodation. Residential element sold in July 1999.
Phased completion to February 2000. £9.1m.

A L M O N DVA L E C E N T R E , L I V I N G S TO N P H A S E I
19,790m2 (213,000ft2) shopping centre refurbishment.
Completed June 1999. £4.8m.

(cid:2) N U N E ATO N
1,210m2 (13,000ft2) retail units.
Completed October 1999. £1.7m.

M I D D L E TO N ROA D, B A N B U RY P H A S E I V

6,020m2 (64,800ft2) industrial/distribution
warehousing. Completed May 1999. £3.9m.

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G U L F H O U S E W 1
9,290m2 (100,000ft2) air conditioned offices and
1,860m2 (20,000ft2) additional retail.
Completion due September 2001. £36.2m.

W H I T E F R I A R S , C A N T E R B U RY

37,160m2 (400,000ft2) retail development with
some residential accommodation.
Phased completion to June 2006. £81.8m.

T H E B I R M I N G H A M A L L I A N C E (limited partnerships

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

C E N T R E , L I V I N G S TO N
16,720m2 (180,000ft2) retail and 7,060m2 (76,000ft2)
leisure, including multiplex cinema (joint ownership
with BAA McArthurGlen).
Completion due October 2000. £40.3m.

T H E B R I D G E S , S U N D E R L A N D P H A S E I I

24,620m2 (265,000ft2) retail.
Completion due September 2000. £40.7m.

S U N D E R L A N D – M A R K E T S Q UA R E

1,460m2 (15,700ft2) retail.
Completion due November 2000. £4.5m.

N E P T U N E P O I N T, O C E A N WAY, C A R D I F F

P H A S E I
5,760m2 (62,000ft2) industrial/distribution
warehousing. Completion due September 2000. £7.1m.

with Hammerson plc and Henderson Investors):–

M A RT I N E AU P L AC E , B I R M I N G H A M
16,720m2 (180,000ft2) retail development.
Completion due October 2001. £14.3m.

B U L L R I N G , B I R M I N G H A M

111,480m2 (1.2mft2) retail development.
Completion due September 2003. £125.0m.

£m refers to estimated capital expenditure.

PROPOSED FUTURE DEVELOPMENTS

(cid:3) 3 0 G R E S H A M S T R E E T E C 2
34,370m2 (370,000ft2) air conditioned offices
and 1,670m2 (18,000ft2) retail.

(cid:3) N E W F E T T E R L A N E E C 4
58,060m2 (625,000ft2) air conditioned offices
and 14,500m2 (156,000ft2) retail/leisure.

(cid:3) E S S O H O U S E / G L E N H O U S E
( I N C L U D I N G 1 6 PA L AC E S T R E E T ) S W 1
46,920m2 (505,000ft2) air conditioned offices
and 12,450m2 (134,000ft2) retail.

C A X TO N G AT E P H A S E I I I , N E W S T R E E T,

B I R M I N G H A M
6,500m2 (70,000ft2) retail and mixed use.

T H E B I R M I N G H A M A L L I A N C E (limited partnerships

with Hammerson plc and Henderson Investors):–

M A RT I N E AU G A L L E R I E S , B I R M I N G H A M
Up to 120,770m2 (1.3mft2) retail and leisure
development.

(cid:3) O LY M P I A G AT E , E A S T K I L B R I D E
18,580m2 (200,000ft2) retail development.

Q U E E N S ROA D R E TA I L PA R K , M A N C H E S T E R

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

P R I N C E S S H AY, E X E T E R
43,200m2 (465,000ft2) retail development with
some residential accommodation.

C O P P E R G AT E C E N T R E , YO R K P H A S E I I
26,800m2 (288,500ft2) retail development with
some residential accommodation.

L A K E S I D E R E TA I L PA R K , T H U R RO C K

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

N E P T U N E P O I N T, O C E A N WAY, C A R D I F F

P H A S E I I
8,360m2 (90,000ft2) industrial/distribution
warehousing.

NEWGATE STREET, NEWC ASTLE UPON TYNE

17,230m2 (185,500ft2) leisure complex, including
multiplex cinema.

H E M E L H E M P S T E A D

23,230m2 (250,000ft2) industrial/distribution
warehousing.

K I N G S WAY R E TA I L PA R K , D U N D E E

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

W E LW Y N G A R D E N C I T Y S I T E A
12,960m2 (139,500ft2) industrial/distribution
warehousing.

A I N T R E E R AC E C O U R S E R E TA I L PA R K ,

L I V E R P O O L
9,660m2 (104,000ft2) retail warehousing.

(cid:3) W E LW Y N G A R D E N C I T Y S I T E B
3,990m2 (43,000ft2) industrial/distribution
warehousing.

A L M O N DVA L E R E TA I L PA R K , L I V I N G S TO N

17,650m2 (190,000ft2) retail warehousing.

Included in capital commitments.

Fully let or agreed to be let

Part let or agreed to be

(cid:3) Added or significantly changed during 1999/2000.

let

(cid:2)
(cid:2)
(cid:2)
(cid:3)
(cid:3)
(cid:3)
(cid:4)
(cid:3)
(cid:4)
(cid:3)
(cid:4)
(cid:4)
(cid:3)
(cid:4)
(cid:3)
(cid:4)
(cid:3)
(cid:4)
(cid:2)
(cid:4)
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We have a long-established commitment to the principle of regeneration.

Our developments are responding to Government policy to renew and regenerate the urban fabric of our major
metropolitan centres. We are working closely with a range of public and private sector partners to promote sustainable
developments which will contribute to the urban renaissance evident in cities such as Birmingham.

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Our development programme includes renovation to provide the latest technology and facilities in our
buildings. Our projects are designed to make our properties more adaptable and better places to occupy.
We aim to create sustainable developments which also enhance the environment for our customers.

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We believe that towns and cities have further potential as centres for a diverse but complementary
range of activities incorporating not only shopping and commerce, but also residential, cultural
and leisure uses.

We actively promote the principle of mixed-use development with extended trading hours so that
towns and cities can act as vibrant and vital centres which are enjoyable places in which to live,
work and play.

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LAND SECURITIES | Operating and Financial Review

Offices

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VALUATION
AT 31 MARCH 2000

% OF GROUP VALUATION

£3,084.7m

41.4

RENTAL INCOME
FOR YEAR ENDED 31 MARCH 2000

£201.9m

% OF GROUP RENTAL INCOME

42.1

VALUATION %

VALUATION BY LOCATION

Total £3,084.7m

52.4

WEST END & VICTORIA

42.2
CITY & MIDTOWN

5.4
ELSEWHERE

RENTAL INCOME %

45.4

WEST END & VICTORIA

46.3
CITY & MIDTOWN

8.3
ELSEWHERE

WEST END & VICTORIA
£1,618.3m | 52.4%

CITY & MIDTOWN
£1,301.2m | 42.2%

% VOIDS BY RENTAL VALUE

0.4
4.3
% REVERSIONARY
AVERAGE UNEXPIRED LEASE TERM (years) 10

ELSEWHERE IN THE UK
£48.9m | 1.6%

GREATER LONDON
& HOME COUNTIES
£116.3m | 3.8%

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Operating and Financial Review | LAND SECURITIES

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The proposed Victoria Street SW1 development

This portfolio, which is located principally in the
City, Midtown, West End and Victoria areas of central
London, was valued at almost £3.1bn at 31 March
2000.After allowing for sales and capital expenditure
during the period the value increased by 7.1%.

In the City and Midtown, rents remained virtually
unchanged throughout 1999 but in the first quarter
of 2000 there have been signs of growth coming
through as demand for space has increased. There is
a limited supply of large units in good locations.
In the West End and Victoria, development activity
has been insufficient to meet demand and rental
growth has been strong in these areas.

As part of our policy of concentrating on larger
holdings, we have sold nine properties in the City
and Midtown for £73m and six buildings in the
West End and Victoria for £52.7m and, assuming the
strong market continues, further sales are planned.

We acquired the IBM Building on the South Bank,
London SE1 for £63.6m with the benefit of a 15 year
lease back to IBM at an initial rent of £4.5m
per annum with indexed uplifts at the 5th and 10th
years. This is a well located building in an area
undergoing major improvements and should provide
capital growth and future development potential.

We also purchased Elliott House, Bressenden Place
and 124Victoria Street SW1 which have potential for
redevelopment on an important corner site adjacent
to some of our key holdings in the area.

The focus of our development activity since our
interim announcement has been the preparation and
submission of three major planning applications. In
the City, at 30 Gresham Street EC2, we have applied

for permission to build a 34,370m2 (370,000ft2)
office building with 1,670m2 (18,000ft2) ancillary
retail space. Site assembly is at an advanced stage and
subject to receiving planning permission we propose
to start work this autumn. At New Fetter Lane in
Midtown we are seeking consent for a 58,060m2
(625,000ft2) twenty storey office building with
14,500m2 (156,000ft2) of retail and leisure at
lower ground, ground and first floor levels. The land
is owned by The Goldsmiths’ Company and, subject
to re-gearing the long leasehold interests which
we already have on a substantial part of the site,
completing the site assembly and viability, we
anticipate this development should commence in the
autumn of 2003. In Victoria we have submitted
an application for
the
redevelopment of our Stag Estate. Our proposals
provide for 46,920m2 (505,000ft2) of office space
in two blocks and 12,450m2 (134,000ft2) of retail.
We plan to start this development in the summer of
2001, subject to receiving planning permission,
obtaining all other consents and viability. A planning
application has also been made for a residential
development to provide 85 apartments on the site
of the existing Neville House office building in
Page Street SW1, to create the maximum return from
this site.

the second phase of

The demolition of Gulf House in Oxford Street W1,
down to second floor level, was completed on
schedule and the creation of 1,860m2 (20,000ft2)
of retail sales space at first floor level and the
building of 9,290m2
air
conditioned
progressing
satisfactorily with completion due in autumn 2001.

(100,000ft2) of

offices

above

The 4,270m2 (46,000ft2) refurbishment at St
Albans House, Haymarket SW1 was completed on

programme and the offices have been let to
e Toys Limited, at an average rent of £463 per m2
(£43 per ft2).

The renovation and air conditioning of the listed
building at 2 Temple Avenue EC4 has also been
completed and the 2,540m2 (27,300ft2) of offices
let to a leading North American firm of lawyers.

We continue to upgrade our investment properties as
opportunities arise, to maintain the portfolio to a
high standard and to respond to the requirements of
our customers. During the year we have let or agreed
to let some 13,020m2 (140,100ft2) in the City and
Midtown and 7,270m2 (78,300ft2) in the West End
and Victoria of newly refurbished space at enhanced
rental levels. For example,
in Portland House,
Bressenden Place SW1 a rental of £495 per m2
(£46 per ft2) has recently been achieved compared
with £393 per m2 (£36.50 per ft2) a year previously,
an uplift of 26%.

In the City and Midtown the indications are that with
the number of new enquiries, together with the
relatively limited supply available, there should be a
satisfactory level of rental growth during the current
year.Thereafter, there is likely to be a period of more
subdued rental growth due to the combined effects
of the potential supply of new developments, the
competitive terms being offered in Docklands and
the amount of space being released on the market
as a result of companies relocating. With very
little space available in the West End and Victoria
and limited development activity,
the prospects
remain good for continued strong rental growth in
these locations.

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LAND SECURITIES | Operating and Financial Review

Shops and Shopping Centres

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VALUATION
AT 31 MARCH 2000

% OF GROUP VALUATION

£2,766.2m

37.1

RENTAL INCOME
FOR YEAR ENDED 31 MARCH 2000

£180.1m

% OF GROUP RENTAL INCOME

37.5

VALUATION %

49.5
SHOPPING CENTRES

28.0

22.5

OTHER IN-TOWN
SHOPS

CENTRAL
LONDON
SHOPS

RENTAL INCOME %

46.5
SHOPPING CENTRES

33.3

OTHER IN-TOWN
SHOPS

20.2
CENTRAL
LONDON
SHOPS

% VOIDS BY RENTAL VALUE

1.3
13.8
% REVERSIONARY
AVERAGE UNEXPIRED LEASE TERM (years) 12

VALUATION BY LOCATION

Total £2,766.2m

GREATER LONDON
& HOME COUNTIES
£309.1m | 11.2%

E. & W. MIDLANDS
& E. ANGLIA

£342.0m | 12.4%

WALES & SOUTH WEST
£362.0m | 13.1%

CITY & MIDTOWN
£39.6m | 1.4%
NORTH, N.W., YORKSHIRE
& HUMBERSIDE

£588.3m | 21.3%

WEST END & VICTORIA
£584.1m | 21.1%

SCOTLAND & N. IRELAND

£541.1m | 19.5%

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Operating and Financial Review | LAND SECURITIES

Livingston – Designer Outlet Shopping and Leisure Centre

This portfolio was valued at over £2.76bn at
31 March 2000. After allowing for sales and capital
expenditure during the period the value increased
by 5.4%.

The limited partnerships forming the Birmingham
Alliance were legally completed last July and,
working with our partners Hammerson plc and
Henderson Investors, good progress has been made
with both the new Bull Ring and Martineau Place.

Retailers’ results continue to impart mixed messages
with a number reporting good trading figures whilst
others are underperforming as
the successful
retailers focus either on leading brands or discounted
merchandise. Good rental growth continues to be
achieved in strong retail locations.

Government planning policy continues to emphasise
the importance of town and city centre regeneration.
One of our main objectives is to work in partnership
with local authorities and other parties to enhance
the appeal of these locations as enjoyable places to
live, work and shop by integrating mixed-use
development within the established fabric of the city
centre. A good example is demonstrated by our
activities in Birmingham. Phase II of Caxtongate was
completed in February and is fully let to a strong mix
of retailers, namely French Connection, Hobbs,
Jigsaw, Muji, Kensington Freak and Ted Baker,
thereby consolidating our Caxtongate ownerships
as a prime fashion destination in the city centre.
The development also includes 24 apartments
which were sold to Crosby Homes. The scheme
complements Phase I within which The Orange Studio,
a comprehensive technology based communication
facility, featuring an internet café, has opened.

The new Bull Ring development began last summer
with the construction of the new market hall, due for
completion this autumn. The CPO inquiry for the
scheme was successfully concluded in February.
Construction of the new shopping centre totalling
111,480m2 (1.2m ft2) is scheduled to start in
spring 2001.The two anchor department stores have
been pre-let to Debenhams and Selfridges. The
redevelopment of Martineau Place started in April
following a successful CPO inquiry, the agreement of
a new Head Lease with the City Council and the
completion of pre-lettings to secure 44% of the
scheme’s income. Phased completion is due in the
spring and autumn of 2001.Works on the removal of
the ‘Bull Street hump’ started in January which, in
addition to benefiting Martineau Place, will also
enhance the value of the Alliance’s ownerships
within the proposed Martineau Galleries site.

At The Bridges in Sunderland we opened the new
760 space multi-storey car park last December and at
the same time handed over the department store to
Debenhams for fitting out. 30 shop units are being
built and only one remains available. The extension
is due to open in September and the enlarged

centre will provide 109 shops totalling 47,840m2
(515,000ft2). Demolition work has also started on
our holding opposite The Bridges at 18/32 Market
Square. The 1,460m2 (15,700ft2) development will
provide four shops due to be completed this
November. It is proposed that the redevelopment
of the remaining units in this parade will coincide
with the completion of the new metro railway from
Newcastle in the spring of 2002.

At Livingston the 23,780m2 (256,000ft2) Designer
Outlet Shopping and Leisure Centre, which is being
developed in association with BAA McArthurGlen,
is scheduled to open in October. Some 52% of
the anticipated rental income is secured subject
to completion of lease documentation. We have
completed the refurbishment of Phase I of the
Almondvale Centre and agreed terms with Asda to
permit the redevelopment of their store over which
we will have purchase pre-emption rights.

Historic cities continue to present
investment
opportunities with the strength of their local and
regional economies boosted by tourism. However,
the delivery and implementation of major shopping
projects in such cities is challenging as we strive to
balance the requirements for vibrant commercial
centres with the need to maintain heritage and
historic values.

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LAND SECURITIES | Operating and Financial Review

following completion of

At Canterbury,
the
development agreement with the City Council and
the successful CPO inquiry, work commenced on the
37,160m2 (400,000ft2) Whitefriars development
last December. As part of the total scheme, terms
have been agreed with Fenwick for them to
construct their new department store of 10,780m2
(116,000ft2) and with Boots for pre-letting a
3,720m2 (40,000ft2) store. In order to preserve
continuity of trade for Fenwick and to allow
time for a major archaeological investigation the
construction is being phased with final completion
in the summer of 2006. In October we purchased
the Marlowe Arcade, which includes a variety
store and 13 shops adjacent to Whitefriars, as
we believe this property will benefit from our
new development.

Last October, Exeter City Council confirmed that they
were minded to grant planning permission for our
43,200m2 (465,000ft2) Princesshay development.
The planning application has been called in and we
are reviewing our proposals for this project.

At York we have revised and enlarged our proposed
scheme and submitted a new planning application
for a 26,800m2 (288,500ft2) extension to our
Coppergate Centre. We are hopeful of obtaining
a detailed planning permission later this year with
a view to starting on site in the autumn of 2001.

In central London we completed the 5,920m2
(63,800ft2) development at 6/17 Tottenham Court
Road W1 where all of the 5,710m2 (61,500ft2)
of retail space has been let and the residential
content sold. The valuation uplift for this property
together with the settlement of some good rent
reviews were important factors in the good overall
return from shops in central London.

for a 18,580m2
We are progressing plans
(200,000ft2) retail development in East Kilbride
to be known as Olympia Gate which will link
our existing Olympia and Princes Mall ownerships
to create an integrated shopping centre totalling
65,040m2 (700,000ft2). The proposals incorporate
a new bus station, highway improvements and

additional car parking. We have appealed against the
deemed refusal of our planning application and a
public inquiry is due to take place this June.

Active asset management throughout the year has
created opportunities to raise income through the
agreement of 320 rent reviews and lease renewals.
In addition 37 surrender and relettings were agreed
with particularly good rental growth in Livingston,
York and Birmingham; some 24 of these relettings
were for terms of 15 years or more.

In working the portfolio, at the Rivergate Centre
Irvine we agreed to take back the existing Tesco
supermarket following which we created eight new
shops of which seven are let subject to completion
of legal documentation. At Ballymena in Northern
Ireland,
following refurbishment of the Tower
Centre, we negotiated a surrender of one of the large
stores and have created a new mall and shops.
Lettings have been concluded in respect of nine of
the ten new units, strengthening the merchandising
mix and improving rental levels by 45% over
previous rents.

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6/17 Tottenham Court Road W1

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Operating and Financial Review | LAND SECURITIES

The core retail portfolio consists of dominant
shopping centres or prime holdings in large regional
cities and towns. This is where we believe that
consumer demand will be greatest as shoppers
are increasingly seeking an enjoyable experience
through the additional leisure, catering and cultural
activities which urban centres provide.

We are continuing to rationalise the portfolio in
accordance with our strategy of concentrating on
larger holdings. During the year we sold two small
shopping centres and 85 properties for £166.0m and
we have identified some £175.0m of high street
shops which no longer fulfil our investment criteria.

In looking to the future, the technological changes
that are taking place will have an impact on the type
and amount of space that retailers require. The
increasing application of e-commerce is providing
new challenges but it will also create opportunities.

In particular, where decisions on fashion and lifestyle
purchases are concerned, we believe there will still
be the need for physical centres to provide
consumers with appealing shopping and leisure
experiences. The link between physical centres and
the Internet will reinforce the success of dominant
centres. However, further research will have to be
undertaken on the potential impact on rent paid
under turnover leases.

HOTELS, LEISURE AND RESIDENTIAL
At Newcastle upon Tyne we have completed land
assembly and demolition in preparation for our
proposed 17,230m2 (185,500ft2) city centre leisure
development. We have secured 11 provisional
Justices licences and pre-let the multiplex cinema to
Odeon Cinemas. Discussions with other potential
occupiers are taking place to secure our required
pre-letting threshold.

The business revolution that is taking place reaffirms
our belief that the best long term performance will
be achieved in dominant city and regional centres
which will attract the bulk of consumer expenditure.
As a result we are concentrating our future
investment and development in these locations.

At Hungate,York a new master plan is being prepared
for this riverside development incorporating a
significantly larger residential content with associated
leisure uses.

At Empress State Building, London SW6 we are
reviewing alternative development options, including
leasing to a hotel operator.

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Sunderland – The Bridges Phase II

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LAND SECURITIES | Operating and Financial Review

Retail Warehouses and
Food Superstores

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VALUATION
AT 31 MARCH 2000

£903.0m

% OF GROUP VALUATION

12.1

RENTAL INCOME
FOR YEAR ENDED 31 MARCH 2000

£51.1m

% OF GROUP RENTAL INCOME

10.6

VALUATION %

PARKS

74.8

25.2

OTHER

RENTAL INCOME %

PARKS

70.7

29.3

OTHER

% VOIDS BY RENTAL VALUE

0.4
11.5
% REVERSIONARY
AVERAGE UNEXPIRED LEASE TERM (years) 21

VALUATION BY LOCATION

Total £903.0m

SCOTLAND & N. IRELAND
£64.5m | 7.2%

WALES & SOUTH WEST
£76.0m | 8.4%

E. & W. MIDLANDS
& E. ANGLIA

£133.6m | 14.8%

NORTH & N. W., YORKSHIRE
& HUMBERSIDE

£337.7m | 37.4%

GREATER LONDON
& HOME COUNTIES
£291.2m | 32.2%

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West Thurrock – Lakeside Retail Park

This portfolio was valued at £903.0m at 31 March
2000.After allowing for sales and capital expenditure
during the year the valuation increased by 7.6%.

Total returns from this sector have been good
due to both the hardening of investment yields
and continued rental growth. The market has
been strengthened by increased demand from the
traditional bulky goods retailers, together with high
street operators wishing to expand out of town.
Currys, Comet, B&Q and Homebase are some of the
major operators seeking substantially larger units
whereas other occupiers such as MFI and Allied
Carpets are seeking to rationalise into less space. We
are working with retailers to provide their preferred
size of store and by reconfiguring our parks to
meet their requirements we are achieving improved
rental and capital values. Examples include the
rearrangement of our park at Aintree, where we
have agreed terms with B&Q to double the size of
their store to 9,660m2 (104,000ft2). We have also
extended the J Sainsbury foodstore at Keighley to
6,910m2 (74,400ft2) and it has been let at a new
rent of £166.80 per m2 (£15.50 per ft2). At
Gateshead we are relocating a number of retailers
and providing The Link with their first purpose-built
out of town unit.

We have extended our park at Chadwell Heath
and acquired additional land at Bexhill-on-Sea,
Chesterfield, Gloucester and Wolverhampton for
extensions subject to obtaining planning permission.
Major upgrading works will be starting at our
Ravenside Retail Park, Erdington in the summer
and we are evaluating refurbishment plans for
other parks.

At Dundee we anticipate obtaining detailed planning
permission to enlarge our existing holding to create
a regional park of 29,730m2 (320,000ft2) and plan
to start on site in September. Over 47% of the new
space is pre-let subject to completion of lease
documentation at higher than anticipated rental
levels. We have agreed a ground lease with Tesco
on the adjoining site to enable them to build a
10,220m2 (110,000ft2) “Extra” store.

At Livingston we have pre-let a 9,290m2 (100,000ft2)
store to Homebase subject to receiving planning
permission. This will form the first phase of
a proposed 17,650m2 (190,000ft2) retail park.
We have obtained open A1 non-food planning
permission to redevelop Lakerise Industrial Estate
at West Thurrock which will enlarge our
Lakeside Retail Park to 33,190m2 (357,200ft2).

Our activities are creating market evidence which
is enabling us to achieve strong rental growth.
Improved rents on review and reletting include
the doubling of rent at White City, Manchester
and increases of between 60% and 95% at Slough,
West Thurrock, Blackpool and Liverpool.

75% of our portfolio by value is in retail parks
of which 56% have open A1 non-food planning
permission.

The impact of e-commerce will affect some retailers
but most retail warehouses should continue to attract
shoppers who require immediate use of purchases
and those who prefer to test and try large ticket
items. In addition it is possible that the location,
accessibility and ease of parking could also make
retail parks suitable customer collection points for
goods ordered on the Internet.

We anticipate strong future income and capital
growth from this portfolio as a result of increasing
occupier demand, restrictive planning policies and
intensive asset management.

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LAND SECURITIES | Operating and Financial Review

Warehouses and Industrial

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VALUATION
AT 31 MARCH 2000

£424.0m

% OF GROUP VALUATION

5.7

RENTAL INCOME
FOR YEAR ENDED 31 MARCH 2000

£31.4m

% OF GROUP RENTAL INCOME

6.6

% VOIDS BY RENTAL VALUE

2.6
1.5
% REVERSIONARY
AVERAGE UNEXPIRED LEASE TERM (years) 10

VALUATION BY LOCATION

Total £424.0m

GREATER LONDON
& HOME COUNTIES
£319.2m | 75.3%

ELSEWHERE IN UK
£10.3m | 2.4%

E. & W. MIDLANDS
& E. ANGLIA
£59.2m | 14.0%

NORTH & N. W., YORKSHIRE
& HUMBERSIDE
£35.3m | 8.3%

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Operating and Financial Review | LAND SECURITIES

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Sunbury Cross

This portfolio was valued at £424.0m at 31 March
2000.After allowing for sales and capital expenditure
during the year the valuation increased by 6.9%.

Total returns from this sector have been good, mainly
due to the hardening of investment yields. In areas
of restricted land supply, buoyant demand has
produced strong rental growth but elsewhere rental
performance has been modest.

We continue to rationalise the portfolio with the
objective of increasing the average lot size and
focusing mainly on the South East where we
anticipate the best returns. Last year we sold
9,060m2 (97,500ft2) of older, smaller properties.

During the year we let 13,170m2 (141,800ft2) at
Tamworth and 17,110m2 (184,200ft2) at Banbury
where we have a further 11,130m2 (119,800ft2)
available for letting. Our combined holdings at these
locations comprise 61,860m2 (665,900ft2) of high
bay warehousing.

The portfolio will be enlarged by our development
programme of 54,300m2 (584,500ft2) which is
either under construction or planned. In February
we began a phased development of a 9 acre site
at Cardiff, within the Bay Regeneration Area, to
provide 14,120m2 (152,000ft2) of industrial and
warehousing space. Since the year end work
has started on a 12,960m2 (139,500ft2) high bay
warehouse at Welwyn Garden City, pre-let to
WT Foods, where we have a further 2.5 acres of land
at the front of the site still to be developed. Contracts
were exchanged with Kodak in September for the
purchase of 13.5 acres at Hemel Hempstead and
outline planning permission has been obtained
for the development of 23,230m2 (250,000ft2) of
industrial warehouse units due to commence later
this year.

We anticipate future development opportunities
where we have secured options over several parcels
of land and are seeking planning permissions for
commercial development. These include two sites

totalling 20 acres close to Heathrow and 300 acres in
a joint venture with Gazeley Properties adjacent to
the M1 at Milton Keynes.

that our portfolio, which

is
We believe
predominantly located in the South East, will benefit
from the continuing strong demand from the service
sector and restrained supply resulting from land
shortages. It is difficult to predict the effects of
e-commerce but it is likely that the importance of
fulfilling customer delivery expectations will create
new demand for depots to service highly populated
urban areas.

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LAND SECURITIES | Operating and Financial Review

Financial Review

PERFORMANCE MEASURES
for the 3 years ended 31 March 2000

18
16
14
12
10
8
6
4
2
0

1 year

2 years

3 years

RoE

Property return

WACC

Average: For year Over 2 yrs Over 3 yrs
Return on shareholders’ equity 15.0% 12.7% 15.5%
Total property return 13.6% 12.7% 15.1%
Pre-tax weighted average cost of capital 9.2% 9.5% 10.4%

INCREASE IN DILUTED NET ASSETS PER SHARE

1 April 1999

VALUATION SURPLUS

SHARE BUY-BACK

RETAINED EARNINGS

OTHER

31 March 2000

pence

975

(1)

1090

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RESULTS
Pre-tax profit increased from £293.3m to £327.7m.
After excluding surpluses of £26.0m over book
values arising on sales of properties, revenue profit
for the year increased by 3.1% to £301.7m. The
increase of £7.5m in pre-tax revenue profit in the
second half of the year, compared with the first half,
primarily results from an additional £10.7m of
rental income offset by a £3.0m increase in net
interest cost.

After taking into account the uplift from the
annual valuation, the share buy-backs and retained
earnings, shareholders’ funds increased by £311.4m,
compared with the previous year, and diluted net
assets per share increased by 11.8% to 1090p per
share. The return on shareholders’ equity was 15%,
and the average return over the last three years has
been 15.5%. After taking account of the reduction in
the fair value adjustment, net of tax, for marking the
Group’s debt to market this year, the annual return
on shareholders’ equity was 17.9%.

REVENUE
Rental income increased from £453.6m to £479.9m
despite a further net reduction in income from the
accelerated rationalisation of the portfolio. Adjusting
for the effects of acquisitions and sales, rental income
on properties owned throughout the period under
review increased by £32.3m. First lettings of
developments provided an additional £12.4m,
including in excess of £1m each from Regis House
EC4, Allington House SW1 and Lacon House WC1.
renewals
Increases

reviews

from

rent

and

contributed a further £12.2m and the net effect of
relettings of voids added £4.1m.

We have secured rental income of £30.8m per
annum from our developments that had not been
received at 31 March 2000. This income will flow
from developments which are soon to be started, are
in progress or have been recently completed. At the
same date we had secured £17.5m of annual rental
income from the investment portfolio which is
subject to rent-free periods. However, property sales,
less acquisitions, completed in the year under review
will reduce rental income in the current year by
some £14.9m. Further sales are also in the course
of negotiation or are planned. In the current year,
we also expect a shortfall of some £4.1m from
properties which will cease to be income-producing
in anticipation of redevelopment or refurbishment.

Further improvements in rental levels have increased
the reversionary potential of the portfolio, excluding
voids, to over 8.7% at 31 March 2000. All sectors of
the portfolio are now reversionary. There are still
some significantly over-rented central London
offices but the majority of the leases of these
buildings still have many years to expiry. Within the
next five years, there is a potential shortfall of less
than £4m of rental income subject to renewal or
options to break in over-rented offices in central
London.

Almost 60% of our rental income is secured on leases
without breaks and with upward only rent reviews
for more than 10 years. The average unexpired lease
term within the portfolio is 12 years.

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Operating and Financial Review | LAND SECURITIES

RENTAL INCOME ANALYSIS

PORTFOLIO ACTIVITY

£m
1998/99 1999/00 Increase

Properties owned throughout period 417.3
33.4
Sales (1998/99 & 1999/2000)
2.9
Acquisitions (1998/99 & 1999/2000)
453.6

449.6
19.0
11.3
479.9

32.3

Increase
First lettings
Reviews and renewals
Net relettings of voids
Other

12.4
12.2
4.1
3.6
32.3

Acquisitions/
Developments

Sales

£m

FRS3
profit

Retail/Leisure

121.1

166.0

9.8

Offices

233.7

131.7

15.8

Warehouses and Industrial

15.4

9.3

0.4

Year ended 31 March 2000

370.2

307.0

26.0

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We reduced the Group’s net irrecoverable property
outgoings by a further £1.2m to £6.3m, which is
less than 1.4% of rent roll net of ground rents.
This mainly reflects a further reduction in the level
of voids in the portfolio to 0.9% of rent roll net of
ground rents.

Property management and administration expenses
include increased expenditure on research, including
e-commerce projects, and further computer systems
development. We expect to continue to spend
substantial sums on research and in re-engineering
the business to take advantage of future growth
opportunities and to meet the demands of rapidly
changing markets.

Interest receivable was significantly reduced due to
the implementation of the development programme,
as we had anticipated, and also, in the last quarter of
the period under review, by expenditure of £249.8m
on the share buy-back programme. During the year,
the average cash balance was reduced from £512.4m
to £331.2m at an average return of 5.6% compared
with 7.2% for the previous year.

The tax charge, equivalent to 24.9% of revenue
profit, reflects the benefit of capital allowances from
developments, refurbishments and acquisitions. The
prior year adjustment reflects the settlement of past
years’ claims for capital allowances. Assuming no
change in the rate of Corporation Tax, we expect the
effective tax rate, before prior year adjustments, to
remain at a broadly similar level while we progress
our development programme. Following the latest

annual property valuation, there is an estimated
potential capital gains tax liability in the region
of £490m.

After taking account of the share buy-back, earnings
per share increased from 39.21p to 45.44p and
adjusted earnings per share from 39.11p
to
40.86p. The Directors propose a final dividend of
22.75p, making an increase of 5.1% for the year.
After all financing costs, dividends and taxation, the
Group produced cash flow for investment of
£79.7m. Capital expenditure exceeded proceeds
from property sales by £194.6m, so there was a net
cash outflow of £114.9m on the Group’s normal
business activities.

BALANCE SHEET
Expenditure on properties amounted to £370.2m, of
which £256.1m was incurred on development and
refurbishment. £231.0m of this relates to costs
associated with
the development programme.
£114.1m was spent on investment acquisitions,
in mind,
primarily with
showing an average initial return of 6.0%.

future development

In the same period, sales of properties with a book
value of £281.0m were unconditionally exchanged
or completed for £307.0m. This represents a 9.2%
surplus over the book value after deducting selling
costs. The properties sold yielded 7.4% and the
proceeds exceeded cost to the Group by £184.1m.

Following some further conversions into equity and
small repayments, total borrowings amounted to

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LAND SECURITIES | Operating and Financial Review

Financial Review (continued)

£1,556.3m at the year end. Short term investments
and cash amounted to £140.1m and the Group also
had £175m of bilateral standby facilities available
should further funds be required. Prior to investment
in the business, funds are invested to achieve the best
returns within rigorous controls which are regularly
reviewed by the Board. In all investment decisions
careful consideration is given to creditworthiness
and setting appropriate deposit limits in order to
minimise exposure to a single institution.

of a reduction in long-term interest rates since the
borrowings were originally taken out, £13.0m in
respect of equity conversion terms of the convertible
bonds and a gain of £2.7m on the swaps. The
adjustment to fair value, after taking account of tax
relief, would reduce reported diluted net assets per
share by 65p and would increase balance sheet
gearing. There is no obligation or present intention
to redeem or retire the borrowings, other than at
maturity, when their redemption would be made at par.

In the autumn, the Group took advantage of the
inverted sterling interest rate yield curve to commit
to four forward-starting swaps, amounting in total to
£400m. These swaps will substantially fix the cost of
new fixed rate borrowing at a competitive cost to the
Group. The average coupon of the borrowings raised
using the new swaps should be about 53/4%; further
explanatory detail can be found in Note 25 on page
58.These swaps are in place to fix the cost of some of
the funds that will be required to implement the new
development programme and, when utilised, will
reduce the average cost of the Group’s borrowings,
which is currently 9%.

In common with many mature UK property
investment 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 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 fixed rate debt to match
its property commitments. As lease lengths are
shortening and the Group considers alternative ways
of holding property, future funding is likely to be of
shorter maturity than previously. The fair values of
the Group’s financial liabilities as at 31 March 2000,
as set out in Note 25 on page 58, exceeded book
values by £529.4m, reflecting £519.1m in respect

At the year end, outstanding expenditure on the
£1.65bn development programme amounted to
some £1.3bn, most of which will be spent over the
next five years. Capital creditors at 31 March 2000
amounted to £54.0m and capital commitments were
£354.6m. The most relevant measure of gearing,
interest cover, was 3.1 times and balance sheet
gearing, taking net debt as a percentage of net assets,
was 24.5% at 31 March 2000. The Group also views
its development programme as a form of gearing and
therefore estimates of balance sheet gearing should
take this into account.

the

addition

In
extensive development
programme, we are considering various other
investment opportunities.We are also continuing our
active programme of rationalising the portfolio and
we have received shareholders’ authority to buy back
up to a further 14.9% of the issued share capital.
We have the flexibility and balance sheet strength
to pursue a variety of alternatives with the prime
objective of maximising shareholder value.

GOING CONCERN
After reviewing detailed profit projections, taking
into account the available bank facilities and making
such 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.

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For this reason they continue to adopt the going
concern basis in preparing the financial statements.

failing

thereby

to equipment

ACCOUNTING ISSUES
The Discussion Paper “Leases: the implementation of
a new approach” was issued by the Accounting
Standards Board (ASB) in December and, in our
response, we have expressed our concern as to the
impractical and potentially confusing consequences
of certain aspects of the proposals. In particular, the
paper attempts to treat property leases in a similar
to
leases,
way
differentiate between equipment leasing contracts,
which are effectively a return of capital, and property
leases, which are primarily a return on capital. The
resulting set of accounts would not show any rental
income in the profit and loss account and would mix
realised and unrealised amounts according to applied
discount rates. This will not, in our view, improve
a reader’s understanding of property company
accounts. The suggestion that the property valuation
should be split into different elements within
to
the balance sheet would also give rise
misunderstanding, particularly as one of
the
elements is misleadingly described as residual value.
There are considerable international pressures to
introduce a new accounting standard for leases and
we can only hope that our serious concerns and
those expressed by the industry in general will
receive an understanding reception.

The situation is further complicated by the position
adopted by the International Accounting Standards
Committee in its proposals for accounting for
investment properties, which would
treat all
leasehold properties, regardless of the length of
lease, as operating leases. If our national accounting
standards were ever to be replaced by International
Accounting Standards (IAS),
latest
proposal could have serious repercussions. We
continue to maintain the view we expressed three

then

this

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LAND SECURITIES

Environment

We are committed to a programme of improving our
performance both in terms of protecting the local
and global environment and in minimising risks to
safeguard the interests of the public and our
shareholders. We fully support the Government’s
aims for sustainable development and are committed
to developing an
the
environment and health and safety. We have
instigated a thorough review of our health and safety
management systems as part of our commitment to
continual improvement and are progressing our
environmental initiatives which include:

integrated approach

ORGANISATIONAL
to
• Affiliation

the Business & Environment

Programme run by the Environment Council.
• Establishment of an internal environmental panel
to facilitate the implementation of our policy
and objectives.

• Annual participation in the Business in the
Environment’s Index of Corporate Environmental
Engagement Survey.

• Founder-membership of

the Property and
Environment Group established by Environmental
Governance and participation in their annual
survey of the sector.

PROCEDURAL
• Annual review of our published environmental

policy.

• Annual review of our energy policy which seeks
ways to reduce energy consumption without
impacting on the performance of our buildings.
Issue of objectives and targets intended to
minimise the environmental impact of our
business activities and a plan to review these
regularly.

•

• Regular updates to our employees on our
environmental policy, objectives and targets, and
the provision of appropriate training to help to
achieve these goals.

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• The maintenance and regular updating of our
environmental manual, which is issued to all staff
by e-mail.
Issue of monthly environmental newsletters to all
staff by e-mail.

•

• Encouraging our tenants, suppliers and con-
tractors to understand our environmental policy
and to adopt similar standards themselves.

OPERATIONAL
• Consideration of environmental factors during
the site selection and design process in order to
minimise any adverse environmental impact by
our developments and to enhance the built and
natural environments whenever possible.

Building Regulations. We aim to publish a Corporate
Environmental Report in summer 2000.

HEALTH AND SAFETY
We attach great importance to health and safety and
employ a full time specialist who has direct
accountability to the Board for the implementation
of our policies to ensure that the correct standards
are maintained at all times. Assisted by external
consultants and the staff generally, he ensures that
comprehensive risk assessments and analyses are
carried out both at existing properties and for
current and proposed developments to ensure that
correct safety standards are maintained.

• Management of all of our construction sites to
and
risk

pollution

the

minimise
contamination.

• Re-use and recycling of materials wherever
practicable and disposal of any waste according to
the best practicable environmental option.

• Submission of our developments and refurbish-
ments for evaluation under the Building Research
Establishment Environmental Assessment Method
(BREEAM), where we seek to achieve the maximum
practical score.
• Commissioning

impact
assessments on all of our proposed major city
centre developments.

environmental

• Ensuring that disturbance to adjoining owners
and occupiers through dust and noise is kept to
a minimum.

• Use of building materials from sustainable sources.

We employ a full time environment and energy
manager who is directly responsible to a Board
member for ensuring that our policies are constantly
reviewed and implemented throughout the Group.
The Group participates in industry forums and has
contributed to working groups which are reviewing
the Climate Change Levy, the Landfill Tax and the

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LAND SECURITIES

Corporate Governance

THE COMBINED CODE – PRINCIPLES OF GOOD
GOVERNANCE AND CODE OF BEST PRACTICE
(DERIVED FROM THE CADBURY, GREENBURY AND
HAMPEL COMMITTEE REPORTS)
The policy of the Board is to manage the affairs of the
Company in accordance with the Principles of Good
Governance and Code of Best Practice as set out in
Section 1 of the Combined Code annexed to the
Listing Rules of the Financial Services Authority.
importance of
While strongly endorsing
accountability,
the view
the Board
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 the Board’s responsibility to ensure good govern-
ance but this process cannot be an end in itself.

the
supports

include

refurbishments,

These matters

DIRECTORS
The Board normally meets at least eight times a year.
Its principal task is to formulate strategy and to
monitor and control operating and
financial
performance in pursuit of the Group’s strategic
objectives. It operates in accordance with a formal
schedule of matters reserved to the Board for
decision.
property
acquisitions and
developments,
disposals in excess of £30 million, fund raising, loan
repayments and treasury policy. They also include
the appointment or removal of directors and the
company secretary and the 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

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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 Sir
Alistair Grant. The Board believes that the present
balance and composition of the Board is appropriate
in the light of prevailing circumstances.

The Board
supplied with comprehensive
management information on a regular and timely
basis, principally by means of monthly Board
Reports 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
instead the entire Board acts as a
Committee;
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 was passed at
the 1999 Annual General Meeting to amend the
Company’s Articles of Association so that every
director is required to stand for re-election every
three years. Non-executive directors are appointed
for an initial period of three years which is
extendable upon mutual agreement.

Directors are provided with training and induction
into the responsibilities of a director prior to, or
immediately 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.

DIRECTORS’ REMUNERATION
Details of the Company’s Remuneration Committee
and directors’ remuneration are contained in the
Report of that Committee on page 34.

RELATIONS WITH SHAREHOLDERS
The Company values dialogue with institutional and
the chief executive
and
private shareholders,
together with the finance director hold regular
meetings with institutional shareholders to discuss
strategic and other issues within the constraints
imposed to ensure 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
the Annual General Meeting as
and regards
the
to meet private
shareholders. Details of proxy voting are disclosed
on each resolution after it has been dealt with by a
show of hands.

principal opportunity

The chairmen of the Audit and Remuneration
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.

for

The Company arranges
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.

Land Sec to pdf 6/14/00 3:16 PM Page 33

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LAND SECURITIES

the scope, cost effectiveness,
objectivity of the external audit.

independence and

VALUATIONS
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.

NON-EXECUTIVE DIRECTORS
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.

ACCOUNTABILITY AND AUDIT
Financial Reporting
The Board seeks
to present a balanced and
understandable assessment of the Group’s position
and prospects, and details are given in the Chairman’s
Statement and the Operating and Financial Review.

Internal Control
The Board has established procedures necessary to
implement the requirements of the Combined Code
relating to internal control as reflected in the
‘Internal Control: Guidance for Directors in the
Combined Code’ (Turnbull guidance) published
in September 1999. In respect of principle D2 of
the Combined Code, the Board has adopted the
transitional approach set out in the September 1999
letter from the London Stock Exchange. A working
party has been established to undertake regular
reviews of the Group’s risk register, in conjunction
with the Internal Audit Department. In addition the
Board will review strategic and general risks on a
regular basis. The Board has always given a high
priority to the assessment and control of risk
throughout the Group.

The Board is 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 procedures 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 assurance against
material misstatement or loss.

The directors have reviewed the effectiveness of
the system of internal financial control, the key
procedures of which are:
(a) clearly defined organisational responsibilities

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.

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 reviews
reports from internal and external auditors, dealing
with any significant control matters raised.

AUDIT COMMITTEE
The Audit Committee consists solely of the non-
executive directors, is chaired by Peter Hardy and
operates in accordance with written terms of reference.

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
It also monitors
internal and external auditors.

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LAND SECURITIES

Remuneration Committee

DIRECTORS’ REMUNERATION
The Company complies with the requirements of the
Combined Code in relation to directors’ remuneration.
The Board has established a Remuneration
Committee which operates within written terms of
reference and which makes recommendations to the
Board on the Company’s framework for and cost of
executive remuneration. No director is involved in
deciding his own remuneration.

1 COMPOSITION OF THE COMMITTEE
The Committee consists solely of the non-executive
directors and is chaired by Sir Win Bischoff.

based companies of similar size from all sectors but
with particular emphasis on the property industry.

In deciding on the appropriate level of remun-
eration, the Board is mindful of the long term nature
of the business and the importance of aligning any
performance awards with returns to shareholders.
It attempts to achieve this balance through a
base annual salary and cash and share 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.

reviews

2 FUNCTION OF THE COMMITTEE
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
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. Following the decision
by the Government to phase out Approved Profit
Sharing Schemes, a review is being carried out into the
remuneration and incentives for all staff with a view
to increasing the proportion of total remuneration
which is performance related.

using

process

experience

responsibilities,

Each executive director receives a salary which
reflects his
and
performance. Salary is reviewed annually and the
review
comparator
includes
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 corresponding improvement 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.

Details of each director’s emoluments and share
options are shown in Note 7 on page 49.

3 REMUNERATION POLICY
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 of remuneration are set to
ensure comparability across a broad spectrum of UK

4 REMUNERATION OF NON-EXECUTIVE

DIRECTORS

The annual remuneration of the chairman of
the Board, Peter Birch,
is determined by the
Committee having regard to independent advice.The
other non-executive directors each receive a fee

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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 EMOLUMENTS AND SHARE OPTIONS
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
10% 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 as progress with
the development programme, property disposal
programme, rent reviews and renewals and levels of
voids, property outgoings shortfalls and bad debts.
With effect from the financial year ending 31 March
2001, payments under this scheme will be matched
by the award of additional bonuses of equivalent
amounts to be satisfied in shares on a deferred basis
with the shares being released after three years
to participants provided they are still employed
by the Group at that time or have left the Group as
“good leavers”.

Land Sec to pdf 6/14/00 3:16 PM Page 35

Following the decision by the Government to phase
out the tax concessions associated with profit related
pay, the Group has replaced the previous scheme,
which was open to all property management and
administration staff, with a scheme which more
closely associates
the
performance of the Group. This new bonus scheme
uses 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.

individual reward with

The 1984 Executive Share Option Scheme expired
in April 1995. As a result, no options have been
granted under the scheme 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 achieved over a series of five-year
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

three

transitional provisions to reflect the Committee’s
original intention that the Plan would be effective
from 1 April 1996 with
transitional
performance periods, each commencing on 1 April
1996 and ending respectively on 31 March 1999,
2000 and 2001. Following the expiry of the second
transitional period, the Group achieved a ranking of
fifth position within the peer group, which resulted
in no award being made in respect of that period.

The interests of the four executive directors at
31 March 2000 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.

open

property management

6 PENSIONS
The executive directors participate
in a non-
contributory defined benefit pension scheme which
was
and
administration staff until 31 December 1998. This
scheme provides them, at normal retirement age and
subject 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.

The following table shows the executive directors’
accrued pension entitlements as at 31 March 2000.
The increase in accrued pensions during the year

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LAND SECURITIES

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
individual directors.

AC C RU E D P E N S I O N S year ended 31 March 2000

Accrued at
31 March 2000
£

Increase during
the year
£

Transfer value
of increase
£

I J Henderson 200,710
126,295
M R Griffiths
125,115
K Redshaw
137,725
J I K Murray

25,295
14,256
13,688
17,734

409,297
218,679
209,968
265,330

7 SERVICE AGREEMENTS
The executive directors have service agreements with
a notice period of one year. The chairman and the
other non-executive directors do not have service
agreements with the Company.

SIR WIN BISCHOFF
Chairman of the Committee
for and on behalf of the Board

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Land Sec to pdf 6/14/00 3:16 PM Page 36

LAND SECURITIES

Directors’ Report

for the year ended 31 March 2000

The directors submit their Report with the financial
statements for the year to 31 March 2000. 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 BUSINESS OF THE GROUP
During the year the Group has continued its business
of property investment and development of offices,
shops, retail warehouses, food superstores, leisure,
warehouse and industrial premises throughout the
United Kingdom, together with the management of
its properties.

2 RESULTS FOR THE YEAR AND DIVIDENDS
The results are set out in the Consolidated Profit and
Loss Account on page 42.

An interim dividend of 8.25p per share was paid on
10 January 2000 and the directors now recommend
the payment of a final dividend of 22.75p per share
making a total of 31p per share for the year ended
31 March 2000, an increase of 5.1% over that for the
previous year.

Subject to authorisation at the Annual General
Meeting to be held on 11 July 2000, the final
dividend will be paid on 24 July 2000 to share-
holders registered on 9 June 2000. The shares
are expected to be quoted ex-dividend from
5 June 2000.

3 VALUATION AND NET ASSETS
(i) Valuation
In accordance with their report reproduced on page
41, Knight Frank valued the Group’s properties at
£7,384.2m as at 31 March 2000. Taken with the
Group’s one third holding in the Birmingham
Alliance, the portfolio had a value of £7,453.7m.
This is an increase of £543.2m over that at the
previous year end. After taking into account total

expenditure on properties of £370.2m and the
aggregate book value of properties sold during
the year of £281.0m,
the surplus on valuation
was £454.0m.

Since Sir Win Bischoff was appointed subsequent to
the last Annual General Meeting, he will retire from
the Board and, being eligible, offers himself for re-
appointment; he does not have a service agreement
with the Group.

(ii) Net Assets
The portfolio valuation has been included in the
financial statements for the year ended 31 March
2000 and the net assets of the Group at that date
amounted to £5,781.8m. 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 1107p. Taking
into account shares reserved for issue under the
terms of the Group’s convertible bonds and employee
share schemes, the diluted net asset value per share
was 1090p.

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
50. The amount, in the region of £490m (1999
£430m), represents approximately 6.6% of the
aggregate valuation.

4 DIRECTORS
The directors who held office during the year were:
*P G Birch CBE FCIB
*John Hull CBE (retired 14 July 1999)
I J Henderson BSc FRICS
M R Griffiths FRICS
K Redshaw BSc FRICS
J I K Murray MA FCA
*P B Hardy
*Sir Alistair Grant DL FRSE
*Sir Win Bischoff (appointed 1 November 1999)

*Non-executive and member of the Remuneration
and Audit Committees.

Biographical details of the directors appear on page 38.

P G Birch, M R Griffiths and K Redshaw retire
from the Board by rotation and, being eligible,
offer themselves for re-election. M R Griffiths and
K Redshaw have service agreements with the
Company with a notice period of one year. P G Birch
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 49
and 50.

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 SHARE CAPITAL
The Company was authorised at the Annual General
Meeting held in 1999 to purchase in the market
Ordinary Shares representing up to approximately
9.25% of the issued share capital at that time. Under
the terms of this authority, 35,990,508 £1 Ordinary
Shares were purchased in the year to 31 March
2000 at an aggregate cost of £249.8m inclusive
of expenses and stamp duty. The reasons for
these purchases are set out in the chief executive’s
Review on page 8. A resolution was passed at an
Extraordinary General Meeting held on 6 April 2000
to grant a further authority to purchase up to 14.9%
of the issued share capital at that date.

Land Sec to pdf 6/14/00 3:16 PM Page 37

LAND SECURITIES

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6 SUBSTANTIAL SHAREHOLDERS
At 12 May 2000 the following interests in issued
share capital had been notified to the Company
under Part VI of the Companies Act 1985.

Prudential Portfolio
Managers Limited
Axa Investment Managers
UK Ltd

No. of shares

30,558,369

5.84

17,115,385

3.28

7 STAFF
The Group operates profit sharing and savings
related share option schemes and administers the
executive share option scheme in respect of the
options outstanding. Under the 1989 and 1999
profit sharing schemes an aggregate of 968,408
Ordinary Shares has been appropriated for the
benefit of employees up to 31 March 2000. Details
of the savings related and executive share option
schemes are shown in Note 6 on page 48. 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 is committed to achieving a high
standard of health and safety and continually reviews
its policies and practices to ensure that those
standards are maintained.

It is the Group’s policy to give full and fair
consideration to the employment of applicants who
are disabled persons.

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

The Group trains and develops its staff to help them
perform in the most productive way to achieve the
Group’s business objectives. Individual performance
is regularly appraised.

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

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

8 DONATIONS
During the year ended 31 March 2000 charitable
donations, including £714,640 paid under Gift Aid
to charitable trusts investigating sites of considerable
archaeological importance, amounted to £827,400.
There were no contributions of a political nature.

12 ANNUAL GENERAL MEETING
Accompanying this Report is the Notice of the
Annual General Meeting which sets out
the
resolutions for the meeting. These are explained in
a letter from the chairman which accompanies
the Notice. There is one special business resolution
which relates to the proposed introduction of a new
share option scheme for senior executives.

13 AUDITORS
A resolution to re-appoint PricewaterhouseCoopers
as auditors to the Company will be proposed at the
Annual General Meeting.

9 ENVIRONMENT
The Group’s environmental policy
on page 31.

is outlined

By order of the Board

P M DUDGEON
Secretary
24 May 2000.

10 YEAR 2000
The actions taken by the Group to ensure year
2000 compliance were successful and no problems
were encountered.

11 PAYMENT POLICY
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.

The Code requires a clear and consistent policy that
payments are made 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
that suppliers are advised
accordingly without delay when invoices or parts
thereof are contested.

to ensure

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

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Land Sec to pdf 6/14/00 3:16 PM Page 38

LAND SECURITIES

Directors and Advisers

LAND SECURITIES PLC

BOARD OF DIRECTORS

Peter G Birch 62

James I K Murray 53

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 61

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

Sir Alistair Grant 63
Chairman of Safeway plc until March 1997.
Chairman of Scottish and Newcastle plc and a
director of the Bank of Scotland.

Sir Win Bischoff 58
Chairman of Citigroup Europe, deputy chairman
of Cable and Wireless plc and a director of the
McGraw-Hill companies. Member of the City
Promotion Panel and of The Council for Industry
and Higher Education.

Appointed a director in 1997 and chairman in July
1998. Chief executive of Abbey National plc until
March 1998. Chairman of the Legal Services
Commission and Kensington Group plc. Director of
N M Rothschild & Sons Limited, Dah Sing Financial
Holdings Limited and Travellers Exchange
Corporation Ltd.

Ian J Henderson 56

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 55

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

Keith Redshaw 54

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.

SOLICITORS
Nabarro Nathanson
Lacon House
Theobald’s Road
London WC1X 8RW

AUDITORS
PricewaterhouseCoopers
Southwark Towers
32 London Bridge Street
London SE1 9SY

VALUERS
Knight Frank
20 Hanover Square
London W1R 0AH

BANKERS
Lloyds TSB Bank plc
72 Lombard Street
London EC3P 3BT

Schroder Salomon Smith Barney
Victoria Plaza
111 Buckingham Palace Road
London SW1W 0SB

REGISTRAR
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex BN99 6DA

STOCKBROKERS
UBS Warburg
1 Finsbury Avenue
London EC2M 2PP

Cazenove & Co
12 Tokenhouse Yard
London EC2R 7AN

Land Sec to pdf 6/14/00 3:16 PM Page 39

Senior Management

PRINCIPAL PROPERTY OWNING COMPANIES

GROUP OPERATIONS

RAVENSEFT PROPERTIES

LIMITED

DIRECTORS
I J Henderson BSc FRICS
K Redshaw BSc FRICS
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

RAVENSIDE INVESTMENTS

LIMITED

DIRECTORS
I J Henderson BSc FRICS
M R Griffiths FRICS
K Redshaw BSc FRICS
R D S Nevett FRICS
R N Hodder ARICS

+K B Venables

THE CITY OF LONDON REAL

PROPERTY COMPANY LIMITED

DIRECTORS
I J Henderson BSc FRICS
M R Griffiths FRICS
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 F H Linnell MA FRICS MCIArb

RAVENSEFT INDUSTRIAL

ESTATES LIMITED

DIRECTORS
I J Henderson BSc FRICS
M R Griffiths FRICS
K Redshaw BSc FRICS
R D S Nevett FRICS

+D P Wynne MLet BSc ARICS

LAND SECURITIES

PROPERTIES LIMITED

DIRECTORS
I J Henderson BSc FRICS
M R Griffiths FRICS
K Redshaw BSc FRICS
J I K Murray MA FCA
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
‡R D S Nevett FRICS

ASSISTANT DIRECTORS
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
*T A Seddon BSc ARICS

SECRETARY
P M Dudgeon LLB FCIS

+appointed 1 April 1999
‡appointed 1 October 1999
*appointed 1 January 2000
†appointed 1 April 2000

LAND SECURITIES

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Land Sec to pdf 6/14/00 3:16 PM Page 40

LAND SECURITIES

Directors’ Responsibilities and Auditors’ Report

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whether the Board’s statements on internal control
cover all risks and controls, or to form an opinion on
the effectiveness of the Group’s corporate governance
procedures or its risk and control procedures.

the

financial statements.

Basis of Audit Opinion
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 disclosures
in
includes
an assessment of the significant estimates and
judgements made by the directors in the preparation
of
and of whether
the accounting policies are appropriate to the
Company’s circumstances, consistently applied and
adequately disclosed.

financial statements,

It also

the

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

Opinion
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 2000 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
24 May 2000

DIRECTORS’ RESPONSIBILITIES
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.

AUDITORS’ REPORT TO THE MEMBERS OF
LAND SECURITIES PLC
We have audited
the financial statements on
pages 42 to 58 which have been prepared under
the historical cost convention (as modified by
the revaluation of certain fixed assets) and the
accounting policies set out on page 46.

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.

Respective Responsibilities of Directors and Auditors
The directors are responsible for preparing the
Annual Report. As described on this page,
this
includes responsibility for preparing the financial
statements, in accordance with applicable United
Kingdom accounting standards. Our responsibilities,
as independent auditors, are established in the
United Kingdom by statute, the Auditing Practices
Board, the Listing Rules of the Financial Services
Authority 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 United
Kingdom Companies Act. We also report to you if, in
our opinion, the directors’ report is not 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 pages 32 and
33 reflects the company’s compliance with the seven
provisions of the Combined Code specified for our
review by the Financial Services Authority, and we
report if it does not. We are not required to consider

Land Sec to pdf 6/14/00 3:16 PM Page 41

Valuers’ Report

The Directors,
Land Securities PLC,
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 or held by way of limited partnership
arrangements as at 31st March 2000, with the
exception of
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.

short

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) 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 proper marketing of the interest,
for the agreement of the price and terms and for
the completion of the sale;

c) 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;

d) that no account is taken of any additional bid by
a prospective purchaser with a special interest;
and

e) that both parties

transaction had
to
acted knowledgeably, prudently and without
compulsion”.

the

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 had been
taken to ensure year 2000 compliance in respect of
the properties and their services. The Company has
informed us that it has completed its program of
review and that no significant problems have been
experienced to date.

for

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
investigating
identifying
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

and

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LAND SECURITIES

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 of those properties held by the
Company and its subsidiaries as at 31st March 2000
totalled £7,384,235,500
(SEVEN THOUSAND
THREE HUNDRED AND EIGHTY FOUR MILLION,
TWO HUNDRED AND THIRTY FIVE THOUSAND,
FIVE HUNDRED POUNDS).

In addition, we have undertaken valuations of those
properties held within the Birmingham Alliance
limited partnerships, in which we understand the
Company holds a one third share, and are of the
opinion that the values as at 31st March 2000
totalled £208,380,000 (TWO HUNDRED AND
EIGHT MILLION, THREE HUNDRED AND EIGHTY
THOUSAND POUNDS). For the avoidance of doubt
we confirm that the figure reported above is of
the total assets held by the limited partnerships
and is not a valuation of the Company’s shareholding
therein.

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.

Within the following tables our valuation of the
Company’s interest in land held by the Birmingham
Alliance limited partnerships is included as a
mathematical one third share of the value reported
above thus producing a total as at 31st March 2000
of £7,453,695,500. We must emphasise that the
apportioned figures do not represent a valuation of
the Company’s shares in those limited partnerships.

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

Knight Frank
20 Hanover Square
London W1R 0AH
28 April 2000

Land Sec to pdf 42-end 6/9/00 5:51 PM Page 42

LAND SECURITIES

Consolidated Profit and Loss Account

for the year ended 31 March 2000

Notes

£m

GROSS PROPERTY INCOME

NET RENTAL INCOME
Property management and administration expenses

OPERATING PROFIT
Profit on sales of properties

PROFIT ON ORDINARY ACTIVITIES BEFORE INTEREST AND TAXATION
Interest receivable and similar income
Interest payable and similar charges
Revenue profit
Profit on sales of properties

PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
Taxation on:
Revenue profit
Property sales
Taxation

PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION
Dividends

RETAINED PROFIT FOR THE FINANCIAL YEAR

EARNINGS PER SHARE

ADJUSTED EARNINGS PER SHARE

DIVIDENDS PER SHARE

DIVIDEND COVER (times)
Profit after taxation
Profit excluding results of property sales after taxation

All income was derived from within the United Kingdom from continuing operations. No operations were discontinued during the year.

The notes on pages 46 to 58 form an integral part of these financial statements.

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2000
£m

528.2

457.2

(32.1)

425.1

26.0

451.1

19.5

(142.9)

£m

292.7

1999
£m

500.2

427.5

(29.0)

398.5

399.1

38.7

(144.5)

327.7

293.3

(76.8)

(.1)

(76.9)

216.4

(165.2)

51.2

(75.7)

252.0

(165.7)

86.3

301.7

26.0

(75.1)

(.6)

Basic

Diluted

Basic

Diluted

39.21p

39.11p

45.44p

40.86p

44.97p

40.63p

31.00p

1.52

1.37

38.95p

38.86p

29.50p

1.31

Land Sec to pdf 42-end 6/9/00 5:51 PM Page 43

FIXED ASSETS
Tangible assets
Properties
Other tangible assets

Investments in group undertakings

CURRENT ASSETS
Debtors falling due within one year
Debtors falling due after more than one year
Investments: short term deposits and corporate bonds

CREDITORS falling due within one year

NET CURRENT (LIABILITIES)/ASSETS

TOTAL ASSETS LESS CURRENT LIABILITIES
CREDITORS falling due after more than one year
Debentures, bonds and loans
Convertible bonds
Other creditors

CAPITAL AND RESERVES
Called up share capital
Share premium account
Capital redemption reserve
Revaluation reserve
Other reserves
Profit and loss account

EQUITY SHAREHOLDERS’ FUNDS

NET ASSETS PER SHARE

DILUTED NET ASSETS PER SHARE

I J Henderson J I K Murray

Directors

The financial statements on pages 42 to 58 were approved by the directors on 24 May 2000.

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LAND SECURITIES

Balance Sheets

31 March 2000

Group

Company

Notes

2000
£m

1999
£m

2000
£m

1999
£m

7,453.7

6,910.5

2,362.2

2,117.9

14.7

13.1

7,468.4

6,923.6

–

4,827.7

7,189.9

–

4,830.1

6,948.0

180.9

1.7

140.1

322.7

(457.1)

(134.4)

71.5

1.0

486.6

559.1

(424.8)

134.3

102.3

–

11.0

113.3

(207.0)

(93.7)

58.5

–

14.3

72.8

(194.4)

(121.6)

7,334.0

7,057.9

7,096.2

6,826.4

(1,282.7)

(1,295.0)

(1,277.2)

(1,286.4)

(247.5)

(22.0)

(272.4)

(20.1)

(41.2)

(7.9)

(66.7)

(7.0)

5,781.8

5,470.4

5,769.9

5,466.3

522.4

305.2

36.0

554.3

284.0

–

522.4

305.2

36.0

554.3

284.0

–

3,582.4

3,286.5

3,764.1

3,750.0

141.2

1,194.6

5,781.8

632.0

713.6

5,470.4

–

1,142.2

5,769.9

179.4

698.6

5,466.3

1107p

1090p

987p

975p

Land Sec to pdf 42-end 6/9/00 5:51 PM Page 44

LAND SECURITIES

Consolidated Cash Flow Statement

for the year ended 31 March 2000

NET CASH INFLOW FROM OPERATING ACTIVITIES

RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received
Interest paid

NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS AND

SERVICING OF FINANCE
TAXATION – Corporation tax paid

NET CASH INFLOW FROM OPERATING ACTIVITIES AND INVESTMENTS AFTER

FINANCE CHARGES AND TAXATION

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

NET CASH OUTFLOW ON CAPITAL EXPENDITURE

EQUITY DIVIDENDS PAID

CASH OUTFLOW BEFORE USE OF LIQUID RESOURCES AND FINANCING

MANAGEMENT OF LIQUID RESOURCES

FINANCING
Issues of shares
Purchase and cancellation of own shares
Increase/(decrease) in debt

NET CASH (OUTFLOW)/INFLOW FROM FINANCING

DECREASE IN CASH IN YEAR

RECONCILIATION OF NET CASH FLOW TO MOVEMENTS IN NET DEBT
Decrease in cash in year
Cash (inflow)/outflow from (increase)/decrease in debt
Cash inflow from decrease 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

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Notes

£m

29.5

(141.1)

(386.3)

196.1

(190.2)

(4.4)

23(a)

(243.9)

23(b)

11.3

2000
£m

432.2

(111.6)

(74.1)

246.5

(194.6)

(166.8)

(114.9)

346.5

(232.0)

(.4)

(11.3)

(346.5)

(358.2)

24.7

(333.5)

(1,082.7)

(1,416.2)

£m

36.3

(143.7)

(255.6)

126.0

(129.6)

(5.8)

1.6

–

(.8)

1999
£m

409.9

(107.4)

(73.4)

229.1

(135.4)

(155.6)

(61.9)

60.7

(.4)

(60.7)

(60.3)

82.5

22.2

(1,104.9)

(1,082.7)

Land Sec to pdf 42-end 6/9/00 5:51 PM Page 45

LAND SECURITIES

Other Primary Statements

for the year ended 31 March 2000

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Profit on ordinary activities after taxation (page 42)
Unrealised surplus on valuation of properties
Taxation on valuation surpluses realised on sales of properties
Total gains and losses recognised since last financial statements

NOTE OF HISTORICAL COST PROFITS AND LOSSES
Profit on ordinary activities before taxation (page 42)
Valuation surplus of previous years realised on sales of properties
Taxation on valuation surpluses 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

RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS’ FUNDS
Profit on ordinary activities after taxation (page 42)
Dividends
Retained profit for the financial year (page 42)
Unrealised surplus on valuation of properties
Taxation on valuation surpluses realised on sales of properties
Premium arising on issues of shares
Issues of shares
Purchase and cancellation of own shares

Opening equity shareholders’ funds
Closing equity shareholders’ funds

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Notes

2000
£m

252.0

454.0

(5.2)

700.8

2000
£m

327.7

158.1

(5.2)

480.6

(75.7)

404.9

(165.7)

239.2

2000
£m

252.0

(165.7)

86.3

454.0

(5.2)

22.0

4.1

(249.8)

311.4

5,470.4

5,781.8

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

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Land Sec to pdf 42-end 6/9/00 5:51 PM Page 46

LAND SECURITIES

Notes to the Financial Statements

for the year ended 31 March 2000

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) CONSOLIDATION
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 2000.

(b) CONSOLIDATED PROFIT AND LOSS ACCOUNT

AND OTHER PRIMARY STATEMENTS
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 com-
paring 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) TAXATION
In accordance with FRS 16 “Current Taxation”, taxa-
tion attributable to sales of properties is charged to
the profit and loss account and to the statement of
total recognised gains and losses as appropriate.

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) PROPERTIES
Properties are included in the financial statements
at open market values based on the latest profes-
sional valuation. At 31 March 2000 a valuation was
carried out by Knight Frank and a copy of their
report is set out on page 41. 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) DEPRECIATION AND AMORTISATION
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 valua-
tion of properties, and the amount attributed to
this factor by the valuers cannot reasonably be sep-
arately 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) INVESTMENTS IN GROUP UNDERTAKINGS
The company’s investments in the shares of group
undertakings are stated at directors’ valuation on a
basis which takes account of the professional valua-
tion of the properties of the group undertakings at
31 March 2000. Surpluses and deficits arising from
the directors’ valuation are taken to revaluation
reserve.

(g) PENSIONS
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.

(h) FINANCIAL INSTRUMENTS
The group currently uses forward-starting interest
rate swaps to help manage its interest rate risk.

Differences that arise on the forward-starting inter-
est swaps will be dealt with on an accruals basis. At
the year end, none of the swaps had commenced
operating.

Land Sec to pdf 42-end 6/9/00 5:51 PM Page 47

LAND SECURITIES

Notes to the Financial Statements

for the year ended 31 March 2000

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

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2000
£m

479.9

48.3

528.2

(16.4)

(54.6)

(71.0)

457.2

1999
£m

453.6

46.6

500.2

(18.6)

(54.1)

(72.7)

427.5

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 refurbish-
ment, costs of investigating potential development schemes which are not proceeded with and £4.2m (1999 £4.2m) in respect of housekeepers and outside staff described as direct property services and
shown in staff costs in Note 5, are also included.

Property Management and Administration Expenses
These include:
Auditors’ remuneration (Company: £68,000; 1999 £66,000)
Staff costs (Note 5)
Directors’ remuneration
Depreciation of other tangible assets

2000
£m

13.9

1.7

2.6

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, £491,300 (1999 £275,400) was payable to the auditors for other services. This comprised compliance and certification work £28,500 (1999 £38,000) and taxation
advice and consultancy fees £462,800 (1999 £237,400).

Interest
RECEIVABLE:
Short term deposits and corporate bonds
Other interest receivable

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

Interest payable includes £0.2m (1999 £Nil) in respect of the bank loan and overdraft.

1999
£m

13.3

1.6

2.2

1999
£m

36.8

1.9

38.7

2000
£m

18.7

19.5

139.9

142.5

1.1

1.9

1.0

142.9

144.5

Land Sec to pdf 42-end 6/9/00 5:51 PM Page 48

LAND SECURITIES

Notes to the Financial Statements

for the year ended 31 March 2000

Staff and Pensions
EMPLOYEES
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

STAFF COSTS
Salaries
Social Security
Other pension
Cash and share incentive schemes

2000
No.

1999
No.

2000
£m

1999
£m

263

184

495

258

13.9

13.3

188

494

3.9

18.1

13.3

1.3

2.6

18.1

3.9

17.5

12.6

1.2

2.2

1.5

17.5

PENSIONS
The group has integrated its two funded Inland Revenue approved non-contributory pension schemes. The scheme, which is closed to new entrants, pro-
vides defined benefits based on final pensionable salary.The assets of the scheme are held in a self-administered trust fund which is separate from the group’s
assets.
Contributions to the scheme are determined by a qualified independent actuary on the basis of triennial valuations using the projected unit method.
The last such valuation as at 6 April 1999, after excluding annuities purchased to provide for pensions in payment, showed a market value of £56.3m and
a corresponding actuarial value of assets of £49.4m.The funding level was 100%.The key assumptions made in the valuation were a total annual investment
return of 7.5%, assuming an increase of 4% in dividend income, a post-retirement investment return of 7%, annual increases of 6.25% in pensionable earn-
ings and 4% in the Retail Prices Index. The company has subsequently adopted the contribution rate recommended by the actuary as part of this valuation.
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 £3.2m (1999 £2.8m).
No other post-retirement benefits are made available to employees of the group.

Executive and Savings Related Share Option Schemes

No. of Options

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At 1 April 1999
Granted

Exercised (Note 20)
Lapsed
At 31 March 2000

Option
price

697p

656p

1984

1983 & 1993
Executive Savings Related
Share Option
Schemes

Share Option
Scheme

457,900

410,789

77,286

98,121

(16,300)

(120,211)

–

(56,025)

441,600

409,960

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.

Land Sec to pdf 42-end 6/9/00 5:51 PM Page 49

LAND SECURITIES

Notes to the Financial Statements

for the year ended 31 March 2000

Directors’ Emoluments, Share Options and Interests in Ordinary Shares
EMOLUMENTS
The emoluments of the directors including pension contributions and £Nil receivable (1999 £178,500) under the long term incentive plan amounted to £1,899,000 (1999 £1,891,000).

£’000

EXECUTIVE:
I J Henderson
M R Griffiths
K Redshaw
J I K Murray

NON-EXECUTIVE:
P G Birch (Chairman – appointed 1.7.98)
John Hull (Chairman 9.12.97 – 30.6.98; retired 14.7.99)
H I Connick (retired 1.7.98)
P B Hardy
Sir Alistair Grant
Sir Win Bischoff (appointed 1.11.99)
Total 2000
Total 1999

Basic
Salary

Profit
Sharing
& Bonuses

Benefits

Car &
Medical

Total Emoluments
excluding Pensions

Pension
Contributions

Fees

2000

1999

2000

1999

335

225

235

–

1,020

922

–

238

118

–

130

–

204

236

395

274

303

331

137

–

347

244

238

247

114

–

141

–

126

–

1,518

381

1,335

378

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 and
1999 Profit Sharing Schemes, payments under the profit related pay scheme and a bonus of 71⁄2 per cent of salary payable under the annual bonus scheme. Bonuses received by K Redshaw and J I K Murray
include £33,750 in recognition of 30 years service to the group and £50,000 as a special bonus respectively.
The total emoluments of the highest paid director, including £Nil (1999 £58,625) receivable under the long term incentive plan and gains before tax of £18,400 (1999 £Nil) made on the exercise of share
options during the year but excluding pension contributions, amounted to £413,200 (1999 £405,625). The accrued pension as at 31 March 2000 for the highest paid director was £200,700 (1999 £173,500).
Pensions of £179,400 (1999 £173,000) were paid to former directors. A brief explanation of pension arrangements for directors, including a table of accrued pension entitlements as at 31 March 2000, and
details of amounts receivable under the long term incentive plan are provided on page 35.

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OPTIONS OVER ORDINARY SHARES

Granted during year

I J Henderson

M R Griffiths

K Redshaw

J I K Murray

No. of
options
at 1 April
1999

27,000
7,508

33,500
4,081
6,797

37,000
6,258

No.

968

277
514
484

Grant
price
(pence)

Exercised/lapsed during year
Market
price on
exercise
(pence)

Exercise/lapsed(L)
price
(pence)

No.

697.0

(4,166)

324.0

765.5

697.0
656.0
697.0

(2,777)

(484)(L)

324.0
697.0

828.5

(2,777)

324.0

828.5

Options at 31 March 2000

Exercisable dates

7/1997 – 7/2004
7/2001 – 7/2004

7/1997 – 7/2004
8/2000 – 7/2005
8/2000 – 10/2004

Exercise
price
(pence)

618.6
608.9*

618.6
580.8*
580.1*

618.6
560.0*

7/1997 – 7/2004
7/2002 – 7/2004

*weighted average exercise price

No.

27,000
4,310

33,500
4,358
4,534
–

37,000
3,481

The range of the closing middle market prices for Land Securities shares during the year was 626.5p to 925.5p. The middle market price at 31 March 2000 was 749p.
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 £46,400 (1999 £25,000).
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 considera-
tion 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 476p 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.

Land Sec to pdf 42-end 6/9/00 5:51 PM Page 50

LAND SECURITIES

Notes to the Financial Statements

for the year ended 31 March 2000

Directors’ Emoluments, Share Options and Interests in Ordinary Shares continued
INTERESTS IN ORDINARY SHARES
The beneficial interests of the directors in the ordinary shares of the company as at 31 March were:

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

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No. of shares

1999

12,722

71,895

25,035

27,643

22,990

19,200

15,000

10,000*

2000

22,864

83,937

30,634

37,349

31,681

19,200

15,000

10,000

*at date of appointment

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 2000 held a non-beneficial interest in 135,876 shares (1999 224,618 shares).
The beneficial interests of I J Henderson, M R Griffiths and J I K Murray each include 2,712 shares (1999 3,029 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 24 May 2000.
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.

Taxation
The charge for taxation is made up as follows:
Revenue profit at the Corporation Tax rate of 30% (1999 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

2000
£m

90.5

(12.2)

1.0

(.2)

79.1

(4.0)

75.1

75.7

1999
£m

90.7

(12.8)

(.3)

77.3

(.5)

76.8

76.9

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 £490m (1999
£430m) for the group and £190m (1999 £155m) for the company.

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Land Sec to pdf 42-end 6/9/00 5:51 PM Page 51

LAND SECURITIES

Notes to the Financial Statements

for the year ended 31 March 2000

Equity Dividends
Interim paid
Proposed final

2000
pence
per share

8.25

22.75

31.00

1999
pence
per share

7.85

21.65

29.50

2000

£m

46.8

118.9

165.7

1999

£m

45.2

120.0

165.2

Interim paid includes additional £0.7m (1999 £1.7m) of prior year final dividend and £0.1m (1999 £0.4m) of interim dividend arising from increases in share capital before the record dates of 11 June 1999
and 3 December 1999 respectively.

Earnings and Net Assets per Share

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

ADJUSTED EARNINGS PER SHARE
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

2000
£m

252.0

1999
£m

216.4

11.3

13.0

263.3

229.4

Weighted average
no. of shares

2000
m

554.4

30.8

585.4

1999
m

551.9

36.8

589.0

Earnings per share

2000
pence

45.44

1999
pence

39.21

44.97

38.95

252.0

(25.4)

226.6

263.3

(25.4)

237.9

216.4

(.5)

215.9

229.4

(.5)

228.9

554.4

551.9

554.4

551.9

585.4

589.0

585.4

589.0

45.44

(4.58)

40.86

44.97

(4.34)

40.63

39.21

(.10)

39.11

38.95

(.09)

38.86

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.

NET ASSETS PER SHARE
Net assets per share are calculated on net assets of £5,781.8m (1999 £5,470.4m) and on 522.4m shares (1999 554.3m shares).
The diluted net assets per share are calculated on adjusted net assets of £6,034.5m (1999 £5,747.9m) and on 553.8m shares (1999 589.6m 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.

Land Sec to pdf 42-end 6/9/00 5:51 PM Page 52

LAND SECURITIES

Notes to the Financial Statements

for the year ended 31 March 2000

Properties
(a) GROUP
At 1 April 1999: at valuation
Additions
Sales

Unrealised surplus on valuation (Note 21(a))
At 31 March 2000: at valuation

(b) COMPANY
At 1 April 1999: at valuation
Additions
Transfers from group undertakings
Sales

Unrealised surplus on valuation (Note 21(b))
At 31 March 2000: at valuation

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Leasehold

Freehold
£m

Over 50
years to run
£m

Under 50
years to run
£m

5,394.0

1,463.4

216.3

(246.8)

185.9

(61.9)

5,363.5

1,587.4

348.4

99.4

5,711.9

1,686.8

53.1

1.3

(5.6)

48.8

6.2

55.0

Total
£m

6,910.5

403.5

(314.3)

6,999.7

454.0

7,453.7

1,879.9

227.8

10.2

2,117.9

123.4

33.9

(123.5)

1,913.7

159.4

2,073.1

10.8

2.6

(2.6)

238.6

40.2

278.8

–

5.8

(5.8)

10.2

10.3

134.2

42.3

(131.9)

2,162.5

199.7

2,362.2

The group’s additions and sales respectively include £33.3m representing the acquisition of its one third share in the Birmingham Alliance’s properties and the consideration it received on the part disposal of
the properties which it contributed to the limited partnerships forming the Alliance.
In respect of the group: freeholds include £394.0m (1999 £371.1m) of leaseholds with unexpired terms exceeding 900 years; leaseholds under 50 years to run include £10.3m (1999 £9.7m) with unexpired
terms of 20 years or less.
The historical cost of properties is: group £3,681.5m (1999 £3,434.2m); company £829.3m (1999 £769.7m).

Commitments for Future Expenditure
Under contract
Board authorisations not contracted

Other Tangible Assets
At 1 April 1999
Additions
Disposals
Depreciation for the year
At 31 March 2000

Other tangible assets comprise computers, motor vehicles, furniture, fixtures and fittings and improvements to group offices.
Depreciation for the year includes £0.2m (1999 £0.2m) treated as other property outgoings in Note 2.

Group

Company

2000
£m

92.6

262.0

354.6

1999
£m

102.8

55.8

158.6

2000
£m

31.9

1.6

33.5

Cost Depreciation
£m

£m

24.7

4.6

(.7)

28.6

(11.6)

(2.8)

(13.9)

1999
£m

34.4

8.8

43.2

Net
£m

13.1

4.6

(.2)

(2.8)

14.7

Land Sec to pdf 42-end 6/9/00 5:51 PM Page 53

LAND SECURITIES

Notes to the Financial Statements

for the year ended 31 March 2000

Investments in Group Undertakings
At 1 April 1999
(Decrease)/increase during the year
Unrealised valuation deficit (Note 21 (b))
At 31 March 2000

Shares
£m

4,631.7

(39.3)

(173.0)

Loans
£m

198.4

209.9

Total
£m

4,830.1

170.6

(173.0)

4,419.4

408.3

4,827.7

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 1999 included valuation surpluses of £2,590.1m. The deficit arising on the revaluation at 31 March 2000 reflects the reduction in net assets of group undertakings following the payment of
substantial interim dividends to the company. 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 39. 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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Debtors
Falling due within one year:
Trade debtors
Capital debtors
Property sales debtors
Other debtors
Prepayments and accrued income
Taxation recoverable

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

Creditors falling due within one year
Debentures and loans (Note 17)
Overdraft
Trade creditors
Taxation and Social Security
Proposed final dividend
Capital creditors
Other creditors
Accruals and deferred income
Deferred taxation

2000
£m

20.4

15.5

113.6

12.2

19.2

–

180.9

1.3

1.7

2000
£m

25.4

3.2

64.3

118.9

54.0

18.4

171.2

1.0

457.1

1999
£m

7.6

3.6

3.8

3.2

40.2

58.5

–

1999
£m

1.5

–

1999
£m

21.8

12.0

1.1

10.0

26.6

–

71.5

1.0

2000
£m

5.2

5.1

52.2

3.9

3.6

32.3

102.3

–

Group

Company

1999
£m

1.6

2.2

58.4

120.0

65.1

16.7

160.5

–

424.8

2000
£m

–

118.9

120.0

18.1

10.9

58.8

–

12.7

10.6

49.6

–

207.0

194.4

Debentures and loans include £0.4m (1999 £0.6m) and £0.3m (1999 £0.5m) of instalments of borrowings that mature after more than one year repayable by the group and company respectively.

Land Sec to pdf 42-end 6/9/00 5:51 PM Page 54

LAND SECURITIES

Notes to the Financial Statements

for the year ended 31 March 2000

Debentures, Bonds and Loans
UNSECURED
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
Bank loan

SECURED
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

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

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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

2000
£m

–

21.2

200.0

196.2

–

417.4

–

8.9

10.0

–

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

2000
£m

–

21.2

200.0

196.2

25.0

442.4

–

8.9

10.0

5.6

32.3

400.0

200.0

1,308.1

1,296.6

1,277.5

1,287.9

(25.4)

(1.6)

(.3)

(1.5)

1,282.7

1,295.0

1,277.2

1,286.4

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 proper-
ties taken out of charge. At 31 March 2000, short term deposits of the group £12.9m (1999 £19.3m) and of the company £11.0m (1999 £14.3m) were charged as temporary security for borrowings.
The company has guaranteed £Nil (1999 £3.0m) of debentures and loans of its group undertakings.
Borrowings of group undertakings of £5.6m (1999 £8.7m) are secured by charges on properties of the company and its group undertakings.

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

Group

Company

2000
£m

206.3

41.2

247.5

1999
£m

205.7

66.7

272.4

2000
£m

–

41.2

1999
£m

–

66.7

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 holders’ 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.
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 6,437,343 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, £25,499,000 of the bonds were converted into 3,984,213 fully paid shares of £1 each.

Other Creditors falling due after more than one year
Deferred income
Deferred taxation
Other creditors

Group

Company

2000
£m

18.6
.1
3.3

22.0

1999
£m

17.5
.1
2.5

20.1

2000
£m

6.8
–
1.1

7.9

1999
£m

6.1
–
.9

7.0

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Land Sec to pdf 42-end 6/9/00 5:51 PM Page 55

LAND SECURITIES

Notes to the Financial Statements

for the year ended 31 March 2000

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

The movements in share capital during the year were:
Allotted:

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 conversion of 7 per cent Convertible Bonds due 2008

Shares cancelled on buy backs (Notes 21(a) & (b))

2000
£m

720.0

522.4

1999
£m

720.0

554.3

Cash consideration (paid)/received

£m No. of shares

.5
.1

120,211
16,300

3,984,213
(249.8) (35,990,508)

(249.2) (31,869,784)

The exercise of all options outstanding at 31 March 2000, 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 851,560 ordinary shares.

Reserves
(a) GROUP
At 1 April 1999
Premium arising on issues of shares
Purchase and cancellation of own shares
Cancellation of shares on buy backs (Note 20)
Unrealised surplus on valuation of properties (Note 11(a))
Realised on sales of properties
Taxation on valuation surpluses realised on sales of properties
Transfers from other reserves
Retained profit for the year (page 42)
Amortised discount and issue expenses of bonds
At 31 March 2000

(b) COMPANY
At 1 April 1999
Premium arising on issues of shares
Purchase and cancellation of own shares
Cancellation of shares on buy backs (Note 20)
Unrealised surplus on valuation of properties (Note 11(b))
Realised on sales of properties and liquidations of group undertakings
Revaluation of shares in group undertakings (Note 14)
Retained profit for the year
Amortised discount and issue expenses of bonds

At 31 March 2000

Capital
Share premium redemption
reserve
£m

account
£m

Revaluation
reserve
£m

Other
reserves
£m

Profit and
loss account
£m

Total
£m

284.0

22.0

(.8)

305.2

284.0

22.0

(.8)

–

3,286.5

632.0

713.6

4,916.1

(194.4)

(55.4)

(249.8)

22.0

36.0

454.0

(158.1)

36.0

454.0

(5.2)

86.3

158.1

(5.2)

(449.3)

449.3

86.3

36.0

3,582.4

141.2

1,194.6

5,259.4

–

3,750.0

179.4

698.6

4,912.0

(194.4)

(55.4)

(249.8)

22.0

36.0

199.7

(12.6)

(173.0)

36.0

199.7

(173.0)

500.6

15.0

(2.4)

500.6
.8

305.2

36.0

3,764.1

–

1,142.2

5,247.5

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 state-
ments, was £500.6m (1999 £50.2m). The significant excess of the company’s retained profit for the year over that of the group is mainly the result of interim dividends paid to the company by its
group undertakings.

Land Sec to pdf 42-end 6/9/00 5:51 PM Page 56

LAND SECURITIES

Notes to the Financial Statements

for the year ended 31 March 2000

Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities
£m
Operating profit (page 42)
Depreciation (Note 13)
(Increase)/decrease in debtors
Increase in creditors
Net cash inflow from operating activities

Analysis of Net Cash Flows
(a) MANAGEMENT OF LIQUID RESOURCES
Net decrease in short term deposits
Sales of corporate bonds
Net cash inflow 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

– Repayment of unsecured debt
– Unsecured bank loan

Debt due after one year – Repayment of secured debt
Increase/(decrease) in debt

Analysis of Net Debt
Bank overdraft
Liquid resources
Debt due within one year
Debt due after one year
Net debt

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2000

1999
£m

425.1

398.5

2.8

(4.2)

8.5

2.4

2.9

6.1

432.2

409.9

2000
£m

346.5

–

346.5

2000
£m

(.6)

(1.0)

25.0

23.4

(12.1)

11.3

1999
£m

45.7

15.0

60.7

1999
£m

(.6)

(.1)

–

(.7)

(.1)

(.8)

1 April
1999
£m

(.3)

486.6

(1.6)

(1,567.4)

(1,082.7)

Movements during year
Non-Cash
£m

Cash Flow
£m

31 March
2000
£m

(.4)

(346.5)

(23.4)

12.1

(358.2)

(.7)

140.1

(25.4)

(1,530.2)

(1,416.2)

(.4)

25.1

24.7

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Land Sec to pdf 42-end 6/9/00 5:51 PM Page 57

LAND SECURITIES

Notes to the Financial Statements

for the year ended 31 March 2000

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, with the exception of the overdraft, at fixed rates.

FINANCIAL ASSETS
The group’s financial assets and their maturity profile are:

Assets:
Short term investments

Maturing in:
One year or less, or on demand

Weighted average period of fixed interest rates
Weighted average interest rate

FINANCIAL LIABILITIES
The group’s financial liabilities and their maturity profile (together with that of the company) are:

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

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

Weighted average period of fixed interest rates
Weighted average interest rate

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

2000
£m

1999
£m

140.1

486.6

2000
£m

1999
£m

140.1

486.6

45 days

105 days

5.8%

6.1%

2000
£m

1999
£m

1,308.1

1,296.6

247.5

272.4

1,556.3

1,569.3

Group

Company

2000
£m

48.4

1,269.7

1,318.7

1999
£m

1.5

11.5

1,341.1

1,354.6

2000
£m

26.1

48.6

1999
£m

1.9

11.7

1,481.2

1,556.3

1,555.1

1,569.3

18.8 years

19.8 years

Land Sec to pdf 42-end 6/9/00 5:51 PM Page 58

LAND SECURITIES

Notes to the Financial Statements

for the year ended 31 March 2000

Financial Assets and Liabilities continued
FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES
Short term investments
Debentures, bonds, other loans and overdraft
Convertible bonds

Group

Book Value

Fair Value

2000
£m

140.1

1999
£m

486.6

2000
£m

140.1

1999
£m

487.8

(1,308.8)

(1,296.9)

(1,827.9)

(1,977.0)

(247.5)

(272.4)

(260.5)

(316.2)

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.

BORROWING FACILITIES
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

2000
£m

100

175

1999
£m

100

–

150

250

FINANCIAL INSTRUMENTS
In order to fix the cost of future borrowings required to finance part of its development programme, the group entered into four forward-starting interest rate
swaps, each for £100m, during the year. The first two swaps have start dates of 30 September 2000 for 15 years and the other two have start dates of 30 June
2002 for 10 years. The total cost of the new borrowings will depend on the differential between gilt rates and swap rates at the time of the issue but, based on the
average differential for the last twelve months, they should cost approximately 6% and 5.25% respectively. The counterparties can extend the duration of each swap
on similar terms.

As the swaps are forward-starting, there is no carrying value in the books of the group as at 31 March 2000. The fair value of the swaps as at 31 March 2000 was
£2.7m.

Membership of Certain Undertakings
During the year, the group has been a member of three limited partnerships, the accounts of which are consolidated with those of the group. Advantage has been
taken of the exemption conferred by Regulation 7 of The Partnerships and Unlimited Companies (Accounts) Regulations 1993 in not delivering the financial
statements of the partnerships to the Registrar of Companies.

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Land Sec to pdf 42-end 6/9/00 5:51 PM Page 59

LAND SECURITIES

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

Ten Year Record

ASSETS EMPLOYED
Properties
Short term deposits, corporate bonds and cash
Other assets

FINANCED BY
Share capital
Reserves
EQUITY SHAREHOLDERS’ FUNDS
Borrowings
Other liabilities

PROPERTY MOVEMENTS (book value)
Additions
Sales

REVENUE
Gross property income
Net rental income
Revenue profit
*Profit/(loss) on sales of properties
Pre-tax profit
Profit attributable to shareholders
Retained profit for the year

CASH FLOWS
Operating activities
Operating activities and investments less

finance charges and taxation

Free cash flow (post-dividend) for investing
Net cash (outflow)/inflow (excludes liquid

resources and financing)

EARNINGS PER SHARE (pence)
On profit after taxation
On results of property sales after taxation
*ADJUSTED EARNINGS PER SHARE (pence)

DILUTED EARNINGS PER SHARE (pence)
*ADJUSTED DILUTED EARNINGS PER SHARE (pence)

DIVIDENDS PER SHARE (pence)

DIVIDEND COVER (times)
*ADJUSTED DIVIDEND COVER (times)
NET ASSETS PER SHARE (pence)
DILUTED NET ASSETS PER SHARE (pence)
MARKET PRICE PER SHARE AT 31 MARCH (pence)

2000
£m

1999
£m

1998
£m

1997
£m

1996
£m

1995
£m

1994
£m

1993
£m

1992
£m

1991
£m

7,453.7
140.1
197.3

7,791.1

522.4
5,259.4
5,781.8
1,556.3
453.0

7,791.1

6,910.5
486.6
85.6

7,482.7

554.3
4,916.1
5,470.4
1,569.3
443.0

7,482.7

6,435.7
547.4
107.7

7,090.8

541.1
4,460.4
5,001.5
1,652.3
437.0

7,090.8

5,760.0
486.7
91.6

6,338.3

515.5
3,521.7
4,037.2
1,849.4
451.7

6,338.3

5,265.7
335.2
94.6

5,695.5

510.2
3,014.3
3,524.5
1,767.2
403.8

5,695.5

5,169.6
209.6
102.5

5,481.7

510.0
3,023.8
3,533.8
1,572.6
375.3

5,481.7

5,032.4
241.5
98.7

5,372.6

509.8
2,943.3
3,453.1
1,573.3
346.2

5,372.6

4,098.6
234.2
93.3

4,426.1

504.8
2,039.5
2,544.3
1,515.6
366.2

4,426.1

4,300.6
307.2
104.2

4,712.0

504.6
2,295.5
2,800.1
1,516.5
395.4

4,712.0

4,708.5
168.7
112.1

4,989.3

504.4
2,866.5
3,370.9
1,268.8
349.6

4,989.3

403.5
(314.3)

267.3
(125.4)

189.6
(246.9)

261.9
(206.1)

199.0
(53.3)

190.9
(81.0)

150.6
(40.8)

237.1
(132.0)

215.5
(3.7)

269.7
(50.6)

528.2
457.2
301.7
26.0
327.7
252.0
86.3

500.2
427.5
292.7
.6
293.3
216.4
51.2

484.0
414.1
265.9
.1
266.0
196.7
45.1

471.0
405.1
235.7
8.1
243.8
178.4
39.3

462.2
400.6
238.7
(1.1)
237.6
171.9
39.3

460.4
400.0
241.3
3.4
244.7
179.7
52.2

448.9
389.4
234.8
2.3
237.1
180.6
58.4

436.9
380.7
233.4
(4.3)
229.1
165.7
50.4

406.7
353.6
227.5
.6
228.1
167.9
58.1

359.7
316.0
215.2
6.9
222.1
159.9
60.3

432.2

409.9

399.5

366.8

389.0

374.6

375.9

373.8

363.6

320.8

246.5
79.7

229.1
73.5

168.2
25.7

194.7
60.5

183.4
54.6

196.2
72.6

184.7
67.7

175.4
64.1

215.2
112.6

193.3
103.4

(114.9)

(61.9)

72.3

34.6

(69.9)

(32.4)

(76.8)

(73.0)

(100.0)

(88.0)

45.44
(4.58)
40.86

44.97
40.63

31.00

1.52
1.37
1107
1090
749

39.21
(.10)
39.11

38.95
38.86

29.50

1.31
1.31
987
975
820

36.84
.23
37.07

36.55
36.77

28.00

1.30
1.31
924
910
1058

34.85
(1.68)
33.17

34.50
32.92

27.00

1.28
1.22
783
774
773

33.69
.23
33.92

33.46
33.67

26.00

1.30
1.30
691
688
626

35.23
(.67)
34.56

34.91
34.28

25.00

1.41
1.38
693
691
594

35.66
(.46)
35.20

35.30
34.87

24.00

1.48
1.46
677
676
628

32.83
.85
33.68

32.76
33.59

22.85

1.44
1.47
504
504
526

33.28
(.66)
32.62

33.19
32.54

21.75

1.53
1.50
555
555
391

31.72
(.87)
30.85

31.66
30.81

19.75

1.61
1.56
668
667
537

*These figures exclude the results of property sales after taxation and, in respect of 1997 only, 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 adjusted dividend cover, which exclude the results of property sales and other exceptional items, are still disclosed.

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Land Sec to pdf 42-end 6/9/00 5:51 PM Page 60

LAND SECURITIES

Major Property Holdings

at 31 March 2000

At 31 March 2000 there were 379 properties within the portfolio. In addition to the sale of 114 proper-
ties during the year, we have undertaken a reclassification of properties and have amalgamated adjoin-
ing properties and properties within development sites. In the lists which follow, the valuation level for
inclusion is £10m.

EC4
CANNON STREET HOUSE AND
MARTIN HOUSE
8,100m2 (87,200ft2) offices, 1996 (R).

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 for 900 years or more.

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

12/16 GOUGH SQUARE
2,540m2 (27,300ft2) offices, 1992.

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

50 LUDGATE HILL
11,040m2 (118,800ft2) offices, 12 shops, 2 public hous-
es and 4 restaurants, 1985 (R).

City, Midtown, West End and
Victoria properties:

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

EC2
VERITAS HOUSE
119/125 Finsbury Pavement: 4,290m2 (46,200ft2)
offices, 1991.

30 GRESHAM STREET
development site for 34,370m2 (370,000ft2) offices and
3 retail units.

51/55 GRESHAM STREET
7,060m2 (76,000ft2) offices and restaurant, 1991.

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

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

EC3
KNOLLYS HOUSE
1/12 Byward Street: 8,620m2 (92,800ft2) offices, bank,
post office and 9 shops, 1964, part 1984 (R), part
1988/1991 (R), part 1998/99 (R). Part air conditioned.

23/39 EASTCHEAP
1,730m2 (18,600ft2) offices, 5 shops and restaurant,
part 1986 (R) and part 1988 (R). Part air conditioned.

13/23 FENCHURCH STREET
15,620m2 (168,100ft2) offices and major retail unit,
1968 and 1984 (R).

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

109/114 FENCHURCH STREET
6,610m2 (71,200ft2) offices and banking space and
2 shops, 1976, part 1991 (R) and part 1993/94/95 (R).

51/54 GRACECHURCH STREET
3,170m2 (34,100ft2) offices, part 1981 (R) and
part 1990 (R).

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

34/36 LIME STREET AND
7/11 CULLUM STREET
3,340m2 (36,000ft2) offices and 6 shops, 1974.

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

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

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

21 NEW FETTER LANE
6,220m2 (67,000ft2) offices, 1978 (R), 1993 (R)
and 1998 (R).

2/4 TEMPLE AVENUE
2,540m2 (27,300ft2) offices and leisure unit,1999 (R).

37/39 AND 40 LIME STREET
AND 4 FENCHURCH AVENUE
9,380m2 (101,000ft2) offices, 1971/72 (R) part
1988/1990 (R), part 1992/94 (R) and part 1998 (R).

WC1
TURNSTILE HOUSE
High Holborn: 7,110m2 (76,500ft2) aparthotel,
shop and 2 restaurants, 1997.

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

14/15 PHILPOT LANE
3,010m2 (32,400ft2) offices, 1986.

WARNER HOUSE
Theobald’s Road: 11,520m2 (124,000ft2) offices, 1999.

LACON HOUSE
Theobald’s Road: 18,910m2 (203,500ft2) offices and
restaurant/leisure, 1999.

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

WC2
40 STRAND
8,570m2 (92,200ft2) offices and 8 shops, 1997 (R).

6/12 FENCHURCH STREET AND
1 PHILPOT LANE
4,780m2 (51,400ft2) offices and shop, 1985.

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

GRAND BUILDINGS
Trafalgar Square: 14,860m2 (160,000ft2) offices and
3,220m2 (34,700ft2) shops, 1991.

Land Sec to pdf 42-end 6/9/00 5:51 PM Page 61

LAND SECURITIES

Major Property Holdings

at 31 March 2000

49/75 BUCKINGHAM PALACE ROAD AND
29 BRESSENDEN PLACE
5,150m2 (55,400ft2) offices, 136 bedroom hotel,
30 flats and 7 shops, 1964, offices 1994 (R).

HAYMARKET HOUSE
Haymarket: 7,520m2 (80,900ft2) offices and 3,410m2
(36,700ft2) of restaurants, 1955, part 1992 (R) and part
1997/98 (R).

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

ST ALBANS HOUSE
Haymarket: 4,270m2 (46,000ft2) offices and 2 restau-
rants, 1963 and part 1987 and 2000 (R).

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

NEVILLE HOUSE
Page Street, 4,780m2 (51,500ft2) offices and a public
house, 1952.

CLIVE HOUSE
Petty France, 9,400m2 (101,200ft2) offices, 1950.

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

TOMEN HOUSE
Charles II Street, 1,440m2 (15,500ft2) offices, 1988.

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7/8 ESSEX STREET
2,610m2 (28,100ft2) offices, 1998 (R).

W1
6/17 TOTTENHAM COURT ROAD
5,710m2 (61,500ft2) retail and 210m2 (2,300ft2)
offices, 1999.

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

26/32 OXFORD STREET
air conditioned bank, large shop, kiosk, restaurant and
1,050m2 (11,300ft2) educational use, 1983 (R).

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

455/473 OXFORD STREET
4 shops and restaurant, 1963.

475/497 OXFORD STREET AND PARK HOUSE
Park Street: 6,980m2 (75,100ft2) offices and
9 shops, 1963.

484/504 OXFORD STREET AND GULF HOUSE
9,290m2 (100,000ft2) offices and 7 shops, 1957.

LONDON HILTON ON PARK LANE
500 rooms, casino and numerous restaurants, 1963.

DEVONSHIRE HOUSE
Piccadilly: 14,190m2 (152,700ft2) offices and 9 show-
rooms 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, 1,460m2 (15,700ft2) offices and 670m2
(7,200ft2) of illuminated advertising, part 1977 (R), part
1979 (redevelopment) and part 1985 (R).

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

THE HOME OFFICE
50 Queen Anne’s Gate: 28,310m2 (304,700ft2)
offices, 1977.

PORTLAND HOUSE
Stag Place: 27,610m2 (297,200ft2) offices and 1,510m2
(16,200ft2) basement restaurant, 1959, part 1986/87
(R), part 1992/95 (R) and part 1996/99 (R).

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

GLEN HOUSE
Stag Place: 9,030m2 (97,200ft2) offices and 16 shops,
1962, part 1983/84 and 1994 (R).

ELLIOT HOUSE
Bressenden Place: 2,720m2 (29,300ft2) offices and
710m2 (7,600ft2) retail, 1964.

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

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

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

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

SE1
ST CHRISTOPHER HOUSE
80/112 Southwark Street, 55,420m2 (596,500ft2) offices,
8 shops, 1960.

THE IBM BUILDING
74-78 Upper Ground: 20,160m2 (217,000ft2)
offices, 1982.

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
715,350m2 (7.7m ft2) of offices and approximately
79,460m2 (855,300ft2) of retail and restaurants.

Towns and cities, outside central London,
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 con-
structed. Stores, supermarkets, banks and combined
units are each shown as one tenancy.

STRATFORD E15
Stratford Centre: 27,870m2 (300,000ft2)
6 stores, 56 shops and 2,580m2 (27,800ft2) of air condi-
tioned offices, 1976 and 1998 (R).

NOTTING HILL GATE W11
8,680m2 (93,400ft2) offices, 52 shops, 2 stores and cine-
ma, 1958.

FULHAM SW6
Empress State Building, Lillie Road: 32,520m2
(350,000ft2), 1962.

1/11 HAY HILL
1,670m2 (18,000ft2) offices and 610m2 (6,600ft2)
retail/showroom, 1987 (R).

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

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

16 PALACE STREET
5,240m2 (56,430ft2) offices, 1960.

ROEBUCK HOUSE
116 flats and fitness centre, 1960.

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Land Sec to pdf 42-end 6/9/00 5:51 PM Page 62

LAND SECURITIES

Major Property Holdings (continued)

at 31 March 2000

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

BALLYMENA
Tower Centre 16,260m2 (175,000ft2): 3 stores and
60 shops, 1981 and refurbished and extended 1999.

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

BATH
7 shops, 1961.

BELFAST
16 shops, 1957, part 1984 and 1995.

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

BIRMINGHAM
Caxtongate Phase II: 6 shops and residential, 2000.

BIRMINGHAM

Martineau Place: 16,720m2 (180,000ft2) retail, and
6,040m2 (65,000ft2) offices.
(one third interest).

Bull Ring: 111,480m2 (1.2m ft2) retail
(one third interest).

Martineau Galleries: up to 120,770m2
(1.3m ft2) retail
(one third interest).

BOLTON
20 shops, 1959.

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

BRISTOL
2 stores, 57 shops, 1957/1962.

CANTERBURY
Longmarket 4,650m2 (50,000ft2): 16 shops, conservato-
ry restaurant and museum, 1992.

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

CANTERBURY
Whitefriars: department store, 2 major stores, 37 shops,
residential and car park.

CANTERBURY
Marlowe Arcade and Graylaw House: store,
13 shops and 710m2 (7,600ft2) offices, 1985.

CARDIFF
St David’s Centre 32,520m2 (350,000ft2): 61 shops,
1981 and 1991 (R). St David’s Link: 12 shops and
library, 1986.

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

EALING
Broadway Centre (part) 3,390m2 (36,500ft2): 11 shops
and 2,020m2 (21,700ft2) air conditioned offices, 1984.

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

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

EXETER
3 stores, 66 shops and 2,580m2 (27,800ft2) offices, resi-
dential and car park, 1952/1964 and 1971.

HULL
48 shops, public house and 2,520m2 (27,100ft2)
offices, 1952/56.

IRVINE
Rivergate Centre: 34,840m2 (375,000ft2) 1 superstore,
4 stores, 59 shops, public house, car park and 9,700m2
(104,400ft2) offices, Phase I 1992 (R) and Phase II
1992.

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

KILMARNOCK
Burns Centre: 3 Phases 17,000m2 (183,000ft2) 3 stores,
36 shops, public house and 1,760m2 (18,900ft2) offices,
1975/79 and 1991 (R).

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

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

LIVERPOOL
St Johns Centre 33,440m2 (360,000ft2):
4 stores, 95 shops, 2 public houses, retail market,
food court, hotel, car park and Beacon, 1989 (R).

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

LIVINGSTON
Designer Outlet Shopping and Leisure Centre, 16,720m2
(180,000ft2) 95 shops, 7,060m2 (76,000ft2): leisure and
food court (50% interest).

NEWBURY
Kennet Centre: 22,300m2 (240,000ft2) 3 stores,
53 shops, mall café, car park and 770m2 (8,300ft2)
offices, part 1972, 1985/89 (R) and 1999 (R).

NEWTOWNARDS
Ards Centre 26,480m2 (285,000ft2): 3 stores, 45 shops,
cinema, 2 drive through restaurants and petrol filling sta-
tion, 1976. Refurbished and extended 1995.

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

PLYMOUTH
1 store, 46 shops, 1952/1965.

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

SUNDERLAND
The Bridges 23,220m2 (250,000ft2): Phase I: 3 stores,
68 shops and mall café, 1969 and 1988 (R): Phase II
24,620m2 (265,000ft2): 2 stores, 26 shops and car park.

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

WALSALL
13 shops, 1970s and 1987.

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

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

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

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Land Sec to pdf 42-end 6/9/00 5:51 PM Page 63

LAND SECURITIES

Major Property Holdings

at 31 March 2000

Retail warehouse and food superstore
properties:

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

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

BLACKPOOL RETAIL PARK
11,290m2 (121,500ft2) 9 retail warehouses, 1993,
95 and 96. Extension planned.

BOLTON
Manchester Road: 7,630m2 (82,100ft2) 6 retail ware-
houses, 1985, 89 and 1997.

BRISTOL
Longwell Green: 6,780m2 (73,000ft2) 2 retail warehous-
es, 1985/86.

CHADWELL HEATH
(Near Romford): 8,510m2 (91,600ft2) 4 retail warehous-
es, 1988 and 1999.

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

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

DERBY
Wyvern Centre: 11,280m2 (121,400ft2) 6 retail ware-
houses and fast food restaurant, 1990 and 96.

DUNDEE
Kingsway Retail Park: 17,350m2 (186,800ft2) 7 retail
warehouses and fast food restaurant, 1985, 87, 88 and
1994. Major enlargement and reconfiguration planned.

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

ERDINGTON
Ravenside Retail Park, Kingsbury Road: 14,310m2
(154,000ft2) 8 retail warehouses, 1987 and 89.
Extension planned.

GATESHEAD
Team Valley, Retail World Retail Park: 34,490m2
(371,300ft2) 19 retail warehouses and fast food restau-
rant, 1987. Additional unit planned.

GLOUCESTER RETAIL PARK
Eastern Avenue: 10,450m2 (112,500ft2) 4 retail ware-
houses, 1989. Extension planned.

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

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

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

KEIGHLEY
Cavendish Street: 6,890m2 (74,200ft2) food superstore,
1985 and 1999.

LIVERPOOL
Racecourse Retail Park, Aintree: 24,850m2 (267,530ft2)
15 retail warehouses and fast food restaurant, 1986, 88
and 1990. Reconfiguration planned.

LIVINGSTON
Almondvale: 9,600m2 (103,300ft2) 5 retail warehouses, 1987.

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

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

POOLE
Commerce Centre 6,380m2 (68,700ft2), 1986 and 87.

Warehouse and industrial properties:

BANBURY
Middleton Road: 37,430m2 (402,900ft2) high bay distri-
bution warehousing, 1995, 98 and 99.

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

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

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

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

HESTON
(Near Heathrow) Heston Centre and Spitfire Trading
Estate: 28,730m2 (309,200ft2), 1977, 1982 and 84.

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

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

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

SUNBURY CROSS
Hanworth Road (includes Interchange West):
29,360m2 (316,000ft2), 1970 and 76.

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

TAMWORTH
Centurion Park: 24,420m2 (262,900ft2) high bay ware-
housing 1996 and 99.

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

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

WAKEFIELD
Ings Road: 9,400m2 (101,200ft2) food superstore
and 2 retail warehouses, 1988, extended 1997/99.

WEST THURROCK
Lakeside Retail Park: 28,870m2 (310,700ft2) 17 retail
warehouses and fast food restaurant, 1988, 89 and 1997.
4,320m2 (46,500ft2) extension planned.

WELWYN GARDEN CITY
Bridge Road: 17,070m2 (183,700ft2), 1955, 1961 and
1976. 12,960m2 (139,500ft2), warehouse planned with
2.4 acre redevelopment site remaining.

WEST THURROCK
Motherwell Way: 29,070m2 (312,900ft2), 1973, 75 and
79 and trailer park of 1.28 acres.

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

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Land Sec to pdf 42-end 6/9/00 5:51 PM Page 64

LAND SECURITIES

Major Property Holdings (continued)

at 31 March 2000

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, Beaconsfield,
Birmingham, Blackpool, Boston, Bournemouth,
Bromley, Bury St Edmunds, Cambridge,
Chelmsford, Chester, Chippenham, Cirencester,
Croydon, Durham, Ealing, Epsom, Erdington,
Falkirk, Glasgow suburbs, Henley on Thames,
Hereford, Horsham, Huddersfield, Ipswich, Kings
Heath, Kingston upon Thames, Leeds, Leicester,
London suburbs, Manchester, Newcastle upon
Tyne, Norwich, Nuneaton, Portsmouth, Reigate,
Rochdale, Rotherham, Rugby, St Albans, Salisbury,
Southampton, Sunderland, Swansea, Tamworth,
Torquay and Watford.

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

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

Outside the City, West End and Victoria, the Group
has holdings in most of the major cities and towns
throughout the United Kingdom which, including
developments and refurbishments, total
566,700m2 (6.1m ft2) of retail space, 171,870m2
(1.85m ft2) of office space, 696,550m2 (7.5m ft2) of
warehouse and industrial space and 460,200m2
(4.95m ft2) of out of town retail and food super-
store space.

The whole portfolio contains in excess of 2,450
shops including 114 supermarkets or stores, each
with an area in excess of 930m2 (10,000ft2).

Glossary of Terms

Adjusted figures
Reported amount adjusted to exclude the
results of property sales

Anchor stores
Major retailers occupying large stores
which serve as a draw to other retailers
and shoppers

ERV
The estimated market rental value of
lettable space as determined annually by
the Company’s valuers

Passing rent
The annual rental income receivable
which may be more or less than the ERV
(see over-rented and reversionary)

Forward-dated swap
An agreement to pay a fixed rate of inter-
est for a period beginning at a future date

Pre-let
A lease signed with a tenant prior to com-
pletion of a development

Average unexpired lease term
Excludes short term lettings such as car
parks and advertising hoardings, residen-
tial leases and long ground leases

Gearing (net)
Total borrowings less short term deposits,
corporate bonds and cash, as a percentage
of shareholders’ equity

Retail park
A scheme of three or more retail ware-
house units aggregating over 4,650m2
(50,000ft2) with shared parking

CPO
Compulsory Purchase Order

Diluted figures
Reported amount adjusted to include
the effects of potential shares issuable
under Convertible Bonds or employee
share schemes

Interest cover
Number of times interest payable is cov-
ered by operating profit and interest
receivable

Net assets per share
Shareholders’ funds divided by the num-
ber of shares in issue at the year end

Earnings per share
Profit after taxation divided by the average
number of shares in issue during the year

Open A1 non-food planning permission
Planning permission for the retail sale of
any goods other than food

Return on shareholders’ equity (ROE)
Increase in diluted net assets per share
together with dividends for the year
(assuming no dividend tax credit)
expressed as a percentage of diluted net
assets per share at the beginning of the
year

Reversionary or under-rented
Space where the passing rent is below
the ERV

Over-rented
Space that is let at a rent above its ERV

Total property return
Valuation surplus, profit on property sales
and net rental income expressed as a per-
centage of opening book value of property
portfolio

Weighted average cost of capital (WACC)
Pre-tax market cost of debt and cost of
equity capital (equity capital cost calculat-
ed assuming equity risk premium of 4%
and using London Business School beta
factor), applied to fair value of debt and
equity market capitalisation and then suit-
ably weighted

Land Sec to pdf 42-end 6/9/00 5:51 PM Page 65

LAND SECURITIES

Investor Information

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: 0870 600 3972.

the Company’s ordinary

Holders of
shares,
debentures and loan stocks should notify the
Registrar promptly of any change of their address.

PERSONAL EQUITY PLANS (PEPs)
The Company’s General and Single Company PEPs,
which were previously managed by Bradford and
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 a 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.

LOW COST SHARE DEALING FACILITY
The Company operates with Cazenove & Co a postal
share dealing facility 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: 020 7606 1768.

DIVIDEND REINVESTMENT PLAN (DRIP)
The Company has introduced a DRIP to enable
shareholders to use cash dividends to purchase
Land Securities shares in the market. For further
details, please contact The Share Dividend Team,
Lloyds TSB Registrars, The Causeway, Worthing, West
Sussex BN99 6DA. Telephone: 01903 502541.

CORPORATE INDIVIDUAL SAVINGS ACCOUNT (ISA)
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
0906 0033133
(calls charged at 60p per minute).

Service. Telephone:

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Analyses of Equity Shareholdings
at 31 March 2000

B Y S H A R E H O L D E R

I N D I V I D UA L S

N O M I N E E C O M PA N I E S

B A N K S

I N S U R A N C E C O M PA N I E S

P E N S I O N F U N D S

OT H E R L I M I T E D C O M PA N I E S

O T H E R C O R P O R AT E B O D I E S

B Y S I Z E O F H O L D I N G

U P TO 5 0 0

5 0 1 TO 1 , 0 0 0

1 , 0 0 1 TO 5 , 0 0 0

5 , 0 0 1 TO 1 0 , 0 0 0

1 0 , 0 0 1 TO 5 0 , 0 0 0

5 0 , 0 0 1 TO 1 0 0 , 0 0 0

1 0 0 , 0 0 1 TO 5 0 0 , 0 0 0

5 0 0 , 0 0 1 TO 1 , 0 0 0 , 0 0 0

1 , 0 0 0 , 0 0 1 a n d a b ove

Shareholders

Shareholdings

No.

24,228
12,557
159
20
43
1,488
949

39,444

61.4
31.8
0.4
0.1
0.1
3.8
2.4

29,460,437
366,472,929
443,582
51,832,060
57,989,679
7,839,318
8,429,165

5.6
70.2
0.1
9.9
11.1
1.5
1.6

100.0

522,467,170

100.0

Shareholders

Shareholdings

No.

13,049
11,578
12,290
1,008
847
202
315
66
89

39,444

33.1
29.4
31.1
2.6
2.1
0.5
0.8
0.2
0.2

3,938,904
8,842,209
25,040,919
7,185,999
18,465,294
14,767,659
68,329,116
48,325,886
327,571,184

0.8
1.7
4.8
1.4
3.5
2.8
13.1
9.2
62.7

100.0

522,467,170

100.0

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

OFFICES
5 Strand, London WC2N 5AF
(Telephone: 020 7413 9000)
and at Birmingham, Glasgow,
Kingston and Leeds