Land Securities

Procurement policy
Land Securities works with a number of consultants, main contractors and subcontractors. Selection is dependent upon the size, value, complexity and location of the scheme. Over the years, Land Securities has built up a working relationship with several organisations that are employed on a regular basis. The procurement strategy is reviewed on a scheme-by-scheme basis, although the most common route is to appoint a main contractor to take over design, management and construction of the scheme. Land Securities is, however, currently working on one scheme on a construction management basis and will be reviewing this option on future projects. Land Securities is a founder member of Asite, an e-procurement and project collaboration tool.

Current and future projects
Land Securities is one of the UK's largest developers. During the financial year 2001/02 it completed some 87,000 m² of its current development programme. Additions to the group's estate totalled £630m. In 2001 the development programme was valued at £2bn, and this was reduced to about £1.6bn by March 2002. This programme will spread over a number of years and will entail the construction of 829,210 m² of space. Of this, 260,160 m² was under construction, and 462,860 proposed in early 2002. When announcing its 2002 interim results, Land Securities noted that it had spent about £145m on development in the six months to September 2002. Meanwhile, the total expenditure required to complete its current development programme as at September 2002 was estimated at £533m, and proposed projects had a value of £874m.

Looking at the various sectors, the group has planning consent for nearly 300,000 m² of office space in London. Schemes under construction include 190 High Holborn and 7 Soho Square (13,500 m² in total). In the retail sector, the largest project is the Bull Ring, due for completion in early 2003. One of the group's largest planned schemes is at Kent Thameside, where outline planning consent will soon be sought for 200,000 m² of commercial space and 7,250 homes. In the retail warehouse market the group has planning consent for 33,300 m² of space.

Essential information
When releasing its latest interim results, Land Securities sought to reassure investors concerned about its exposure to the office market that it is adopting a cautious approach to speculative development.

Land Securities' involvement with the BBC could strengthen as the company is in advanced discussions concerning property joint ventures. As part of the deal, the BBC's Broadcasting House would be redeveloped at a cost of £300-400m. Were Land Securities to secure the deal, it would take a 50% stake in Broadcasting House, and in return take the capital risk of redeveloping the building and maintain it. The BBC envisages undertaking similar ventures for its other buildings.