Here we show how the Company has performed and how this performance translates into value creation for investors. The key metrics below are the main drivers of our most important indicator of progress – total return – which can be seen below.

Our key metrics

Our dividends are paid out of earnings, which in turn are closely linked to revenue profit – our metric for our underlying profit.

Our net asset value per share is driven by the valuation of our assets in the year together with the effect of gearing. As values rise or fall, gearing can have a positive or negative impact on NAV.

The metrics here should be viewed alongside our key performance indicators, which outline the specific objectives, measures and achievements that we set out for the year.

Chart 1

Revenue profit

£274.7m 9.1%

Chart 2

Adjusted diluted earnings per share

36.31p 6.5%

Chart 3

Dividend per share

28.2p 0.7%

Chart 4

Group loan to value ratio1

39.0% 4.5pts

Chart 5

Valuation surplus/(deficit)1

£908.8m surplus

Chart 6

Adjusted diluted NAV per share

826p 19.5%

The two total return metrics below provide shareholders with the clearest guide to the Company’s progress in financial terms. We also show how our performance looks in the context of the FTSE 100, FTSE 350 Real Estate companies, and the property market as a whole.


Total shareholder return


Total business return


The Board ensures the interests of shareholders and Executive Directors are aligned in setting Directors’ remuneration. Incentives are linked to Total Shareholder Return (TSR) and Total Property Return. Total Business Return reflects the growth in adjusted diluted net asset value per share plus the dividend paid, while Total Shareholder Return reflects the growth in our share price plus the dividend. The Board is committed to the use of these metrics as a way to assess performance.

How we compare

These metrics show whether we are outperforming or underperforming our peers in the capital markets and the property market. They enable us and our shareholders to take an objective view on our performance.

Geared performance

+16.0% over 1 year

Table 7 – Total shareholder returns1

Over one year to 31 March 2011 (£)
Land Securities 116.04
FTSE 100 109.43
FTSE 350 Real Estate 115.49
  1. Historical TSR performance for a hypothetical investment of £100.
    Source: Datastream.

Ungeared performance equates to 5.0% relative outperformance in the year

Chart 8 – Total Property Return relative to IPD

Ungeared total return (12 months ended 31 March 2011)

Chart 08

  • Land Securities
  • IPD Quarterly Universe
  1. Land Securities total return higher by 0.9% for London offices and 0.5% for total portfolio if adjusted for capital extracted from Queen Anne’s Gate, SW1 through bond issue.
  2. Includes food stores for Land Securities.

Key performance indicators




To deliver sustainable long-term shareholder returns
  • Three year Total Shareholder Return (TSR) performance compared to the TSR performance of an index of comparator group of FTSE 350 companies
  • TSR outperformed competitor group by 3.6% for two year period from April 2009 (date of introduction of TSR performance metric)
Maximise the returns from the investment portfolio
  • IPD outperformance in each core sector
  • Shopping centres – outperformed IPD benchmark by 1.6%
  • Retail warehouses – outperformed IPD benchmark by 5.0%
  • Central London shops – outperformed IPD by 10.3%
  • London offices – underperformed IPD benchmark by 1.8%
Manage our balance sheet effectively
  • Manage balance sheet gearing through achieving an approximate matching between receipts from disposals and outgoings on development and acquisitions
  • There were £614m of disposals in the year. Acquisitions were at £400m and, in addition, capital expenditure totalled £249m, giving outgoings of £649m against the £614m of disposals. With rising values, this contributed to a reduction in our LTV ratio, moving from 43.5% to 39.0%
Maximise development lettings
  • £32m of development lettings

  • Progress lettings at One New Change
  • Progress Trinity Leeds pre-lettings
  • £25.6m of lettings achieved with London Portfolio £13.6m and Retail Portfolio £12.0m
  • Retail element 100% let and offices 73% let
  • Trinity Leeds at 53.0% pre-let and 4.5% in solicitors’ hands
Grow London development pipeline
  • Submit planning applications on five additional projects by end March 2011
  • Four planning applications submitted (934,000 sq ft) and one submitted in April 2011
Ensure high levels of customer satisfaction
  • Overall customer satisfaction in Retail and London businesses to exceed targets
  • In both the London and Retail Portfolios we moved to an overall customer satisfaction score. Retail scored 4.27 against a target of 4.17 and London scored 4.18 against a target of 3.74
Attract, develop, retain and motivate high-performance individuals
  • Employee engagement to exceed ETS industry benchmark
  • Exceeded with a grand mean score of 3.15 (classified as excellent by our external survey provider) compared to the ETS industry benchmark score of 3.12
Continually improve sustainability performance
  • Reduce carbon emissions from managed portfolio by 30% by 2020 (against 2001 benchmark)
  • Increase reused/recycled waste in London and Retail Portfolios
  • Establish long-term reduction target for water reduction
  • While our carbon emissions are at a lower level than our benchmark, last year saw an increase in carbon emissions from our portfolio. We believe this was largely a result of adverse weather conditions
  • Retail achieved 78% waste diverted from landfill (against a 70% target)
  • London achieved 70% waste recycled (against a 70% target)
  • Technologies researched and normalised target to be set for 2011/12

Our performance – Retail Portfolio

Our Retail Portfolio, valued at £4,823.9m at 31 March 2011, produced a valuation surplus for the year of 8.5% overall, with shopping centres and shops up 7.5% and retail warehouses and food stores up 11.2%. Rental values on our like-for-like portfolio decreased marginally by 0.3% for our shopping centres and shops but increased by 0.4% for our retail warehouses and food stores.

Our performance – London Portfolio

Our London Portfolio, valued at £5,735.0m at 31 March 2011, produced a valuation surplus for the year of 10.8% overall. West End offices were up 6.8%, City offices were up 12.0% and central London retail up 21.5%. Rental values in our like-for-like portfolio increased by 5.9% for West End offices, 8.7% for City offices and 22.2% for central London retail.

We are confident in our plans and well positioned to address growth opportunities. Our strong balance sheet, access to capital and excellent relationships with occupiers provide us with enormous scope for value creation in a fast-evolving market. By restarting development first we have signalled our ambition to stand apart in our industry. Now we are focused on turning our tactical advantages into strong and tangible returns for shareholders.

Retail outlook

The retail landscape is undergoing fundamental change through evolving consumer behaviour and the rise of the internet. While this poses challenges in the sector, we anticipate further buying opportunities and the potential to take forward a range of asset management and development opportunities within our portfolio.

London outlook

The outlook for our market and for our excellent portfolio of assets is positive. Fundamental drivers for rising rents include limited supply of new space due to the development hiatus during the downturn; high levels of lease expiries from 2013; and prospective occupiers using the end of leases to rationalise estates and move to buildings fit for today’s corporate requirements.

Our key objectives for 2011/12


  • Outperform the UK Real Estate sector on Total Shareholder Return
  • Increase revenue profit
  • Secure lettings on our development projects
  • Manage balance sheet gearing to plan

Retail Portfolio

  • Outperform IPD
  • Expand our out-of-town development programme
  • Progress development lettings in Cardiff, Trinity Leeds and Buchanan Street, Glasgow

London Portfolio

  • Outperform IPD
  • Progress on time and to budget at 62 Buckingham Gate, SW1, 123 Victoria Street, SW1, Wellington House, SW1, 20 Fenchurch Street, EC3, 110 Cannon Street, EC4 and 40 Strand, WC2
  • Obtain planning consent and start on site at 30 Old Bailey and 60 Ludgate Hill, EC4

Development pipeline

Cannon Street

110 Cannon Street, EC4

Victoria Street

123 Victoria Street, SW1

Trinity Leeds

Trinity Leeds

Buchanan Street

185-221 Buchanan Street, Glasgow

Buckingham Gate

62 Buckingham Gate, SW1

Old Bailey

30 Old Bailey and 60 Ludgate Hill, EC4

Fenchurch Street

20 Fenchurch Street, EC3

Our valuation

Table 9 – Investment portfolio – by sub-sector

Proportion of portfolio
Market value 31 March 2011
Valuation surplus H1
Valuation surplus H2
Valuation surplus 12 months
Shopping centres and shops 27.0 2,853 2.5 5.2 7.5
Retail warehouses and food stores 12.3 1,298 2.3 8.9 11.2
Central London shops 9.6 1,015 9.0 12.3
London offices 42.9 4,582 2.9 6.0 8.8
Other 8.2 865 4.8 2.4 7.0
Total investment portfolio 100.0 10,559 3.4 6.4 9.7

Table 10 – Investment portfolio – by activity

Proportion of portfolio
Market value 31 March 2011
Valuation surplus 12 months
Like-for-like 73.4 7,749 8.4
Acquisitions 3.8 403 1.5
Completed developments 10.9 1,153 11.6
Proposed developments 1.6 171 19.4
Development programme 10.3 1,083
Total investment portfolio 100.0 10,559 9.7

Table 11 – Like-for-like portfolio – by sub-sector

Market value
31 March 2011
Valuation surplus
Rental value change1
Net initial yield
Equivalent yield
Movement in equivalent yield
Shopping centres and shops 1,833 7.0 -0.3 6.2 6.5 48
Retail warehouses and food stores 1,203 10.9 0.4 5.2 5.7 57
Central London shops 788 14.3 22.2 4.2 5.2 23
London offices 3,139 7.4 7.1 5.8 5.9 36
Other 786 6.5 3.7 6.4 6.6 51
Total like-for-like portfolio 7,749 5.7 6.0 43
  1. Excludes units materially altered during the year and also Queen Anne’s Gate, SW1.

Table 12 – Like-for-like portfolio – analysis of voids

...of which...

31 March
31 March
Temporary letting
Under offer
Shopping centres and shops 8.1 5.9 2.2 0.8 2.9
Retail warehouses and food stores 1.9 3.3 0.2 1.2 1.9
Central London shops 6.3 4.4 0.1 3.93 0.4
London offices 4.9 3.7 1.2 0.4 2.1
Total like-for-like portfolio 0.6 0.9 0.8
  1. Expressed as a percentage of ERV. Temporary lettings of up to and including 12 months are also treated as voids.
  2. Residual voids are voids excluding pre-development properties, temporary lettings and units under offer.
  3. Includes conditional letting to Primark on Oxford Street, W1.