Land Securities to build on London office shortage

Land Securities signalled its intention to build more prime London offices yesterday to exploit the prospect of an "even more acute"-than-expected gap between supply and demand.

Numerous office projects were put on hold when the financial crisis struck in 2008. But while the economic recovery, and the stability in the fortunes of the financial sector, has led to a revival in demand, supply levels remain constrained.

"Consistent with our view last year, we expect the strongest rental value growth to occur for our London offices and we continue to believe that the best way to capture this is by undertaking speculative development projects in the best locations in London," said Francis Salway, Land Securities' chief executive.

He added that the expected under-supply in office space in the capital "may be even more acute than originally forecast". His comments came as Land Securities, which is involved in building the "Walkie-Talkie" tower at 20 Fenchurch Street and One New Change near St Paul's Cathedral, revealed that its net asset value stood at 826p per share at the end of March, up nearly 20 per cent from a year ago.