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Land Sec reports zero lettings in Q408

Land Securities chief executive Francis Salway confirmed that the group had not managed to complete any office development lettings during the last quarter of 2008, including a failed short-term lease of its Thomas More Square building to News International.

The company said it was now reviewing refurbishment options for the buildings.

Mr Salway failed to give an update on the most recent valuation of the company's office and retail assets but said the outlook continued to cause concern.

He said maximising income from its multi-billion pound portfolio will be crucial as it battles what it described as 'one of the most challenging periods in generations'.

The major UK developer, which confirmed it would not look to start on site with any new projects in London until 2012, said the majority of its building programme in the capital was completed by the end of last year. It said this was 'in line with our anticipation of a slowdown in the London office market in around 2009'.

Mr Salway said: 'Commercial property has gone through an unprecedented period of re-adjustment. The speed of valuation decline allied to rising insolvency rates mean the sector is facing one of the most challenging periods in generations.'

During the quarter, Land Securities did submit a planning application for its Wellington House development on Buckingham Gate. The submission followed those for the Victoria Transport Interchange and Selborne House proposed development sites and Arundel Great Court, which it submitted in September 2008.

Mr Salway said all of those schemes could be completed from 2012 and 'represent opportunities for the next cycle'.

He added: 'Our objective continues to be to navigate a prudent line through the current volatilities by concentrating on the management of our balance sheet and the leasing up of our developments. Neither will be easy in the current environment but we are pleased with the progress we have made.'

The firm said the £750 million sale of its outsourcing arm Trillium in January had also helped to boost the group's balance sheet.