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Land Securities on pounds 650m buying spree

LAND SECURITIES, the United Kingdom's largest property company, yesterday announced plans for a pounds 650m development programme to take advantage of the buoyant market.

The scheme, the largest it has undertaken since the property market was booming a decade ago, comes hot on the heels of a pounds 420m development programme the group has just completed.

The news came as Land Securities unveiled a strong set of results for the year to March.

The sharp growth in the property market helped net assets per share rise 18 per cent to 924p. Pre-tax profits increased 9 per cent, to pounds 266m.

Ian Henderson, Land Securities' managing director, ruled out any corporate activity, saying that the group was not considering any mergers or acquisitions.

"We see a lot of speculation about mergers. But it is very difficult when assets are standing at a premium to make any sense of those transactions," he said.

Land Securities said that demand for property was strong across the board. The group plans to continue to concentrate on the central London office market, the out-of-town retail market, some industrial developments and "one or two leisure opportunities".

Mr Henderson said the company's policy of selling properties which no longer provided future growth and replacing them with buildings giving increasing income in the future, might mean that short-term profits could be hit. The group disposed of pounds 247m of property during the year as part of its effort to churn its estate.

However, he said that the property market was unlikely to return to the boom times of the 1980s. "I think it's steady as we go," he said.

Mr Henderson pointed out that the market had so far ridden the strength of sterling, higher interest rates and the economic turmoil in Asia well, but he remained cautious about the future.

Peter Birch, the former chief executive of Abbey National, is to become chairman of the group this July, replacing Sir Peter Hunt, who died in December last year. Land Securities shares closed down 6p at 1,016p.