Land Securities says tenants not deterred by 'Walkie Scorchie' problem

LONDON Tue Nov 12, 2013 10:39am GMT

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LONDON (Reuters) - Land Securities, Britain's largest listed property developer, is close to solving the incendiary solar glare problem for the "Walkie Talkie", its landmark new 37-storey glass office block in the City of London, and it continues to attract tenants, the company said on Tuesday.

"Despite the solar glare issue of the summer, occupiers have not been blinded to the efficiency and location of the building. We are close to resolving the issue and it will not delay occupation nor inflate the budgeted cost," it said.

The skyscraper at 20 Fenchurch Street was dubbed the "Walkie Talkie" by Londoners because of its flared shape but then became known as the 'Walkie Scorchie' last summer after it was blamed for scorching the panels of a Jaguar car and the seat of a bicycle parked on a street below.

But Land Securities said on Tuesday the scheme was now 56 percent pre-let with a further 20 percent in the pipeline ahead of the building opening to users next April.

Chief Executive Rob Noel told Reuters that that the cost of the solution - expected to be in the low, single-digit millions - would be borne by the project's contingency fund and would include solar shading being applied to the tower's exterior.

A temporary scaffold screen was put up in September outside the tower to shield affected shops.

"The cost will be minimal. When you are pushing the boundaries of physics when building these tall buildings you won't always get it right," Noel said.

Land Securities jointly owns the building with Canary Wharf Group, which is majority owned by Songbird Estates.

The skyscraper was one of the projects that Land Securities restarted in London after the financial crisis in a bet that the British capital's office market would face a shortage of space after construction plummeted during the downturn.

"The demand that we said was going to come is now coming," Noel said, adding that it was coming from insurance, business services and media firms as well as a number of foreign banks.

Earlier on Tuesday the company reported that its adjusted diluted net asset value per share rose by 3.8 percent from six months ago, to 937 pence on Sept 30, while its underlying pre-tax or "revenue" profit rose 8.9 percent to 156.5 million pounds. It also increased its half-year dividend by 2.7 percent to 15.2 pence.

At 1023 GMT the shares were trading down 0.3 percent at 976.5 pence.

(The story adds dropped word 'glass' in first paragraph)

(Editing by Greg Mahlich)

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