Land Securities posts strong results but fears 'painful' Brexit vote
Developer Land Securities, the firm behind the Walkie Talkie skyscraper in London, has posted strong full-year trading, but warned a Brexit vote would "be painful for the property industry".
The FTSE 100 business said a vote to leave the EU on June 23 would slow decision-making, drive down demand and lead to falling rents.
Earlier this week rival British Land also warned that a Brexit vote would have an "adverse impact" on business.
Land Securities said its profit before tax fell by 45% to £1.3 billion in the 12 months to the end of March compared to a year ago.
However, other key industry measures showed the value of its assets rose by 10.3% to 1,482p a share in the period, while revenue profit, which includes joint ventures, was up 10% to £362 million. Shares lifted almost 3%.
Chief executive Robert Noel said: "We are pleased to report a strong performance for the year.
"Revenue profit and net asset value per share are up, lease terms are longer and, as planned, speculative development exposure and net debt are lower."
But Mr Noel painted a bleak picture of what the UK leaving the EU may mean for the property industry.
He said: "We believe a vote to leave the EU would lead to business uncertainty while negotiations take place on an exit treaty.
"Over the short term, we anticipate this would drive down occupational demand in our market. In turn, this would lead to falling rental values and a reduction in construction commitments, particularly in London.
"So an exit could be painful for the property industry and those it supports."
Land Securities' portfolio of properties includes full ownership or stakes in the renowned Piccadilly Lights building in London, as well as the Bluewater shopping centre in Kent and the St David's retail development in Cardiff city centre.
Analysts at Liberum said: "Net asset value for 2016 is in line with our expectation, but earnings and the dividend are comfortably ahead demonstrating confidence in the positioning of the portfolio."