But it warned that more demand from tenants, and a return to rent increases, would be needed to keep the momentum going.
'Rental growth usually lags behind the recovery in the economy,' said Peter Hunt, Land's chairman and managing director. 'So whilst there will inevitably be some form of rental growth, it will not be the same as in the 1980s.'
But he added that, while rents in central London were still falling, there were signs that those for the best properties might be reaching a floor. Outside London, rents had stopped falling and retail warehouses were returning to growth.
Mr Hunt's comments came as the group revealed that its rental income for the six months to September was pounds 192m, up from pounds 187.6m. And it warned that, until there was a recovery in the rental market, income from the existing portfolio was likely to remain flat.
The group did let a number of properties, but these were offset by lease expiries and bankruptcies and the vacancy level rose from 2.5 per cent in March to 3 per cent. Pre-tax profit was pounds 118.9m, up from pounds 116.5m, and earnings were 16.64p (16.52p) a share. The dividend is 4.8 per higher cent at 6.3p.
The group, which raised pounds 150m through a convertible issue in May, has spent pounds 70m on property and is still considering purchases. Mr Hunt admitted that the increased interest from institutional buyers was making the market more competitive.
Graham Stanley, property analyst with NatWest Securities, is forecasting net asset value of 579p a share in March, up from 504p last time. But he pointed out that, if yields fall to 7 per cent - as surveyors are suggesting - it could rise to 800p by 1995. The shares rose 6p to 734p.Reuse content