Land Secs says lettings and asset sales slowing

By Sinead Cruise

LONDON (Reuters) - The stricken quoted property sector faces up to a year more of market turbulence as it waits to see how occupiers grapple with poorer economic conditions, Land Securities (LAND.L) said on Wednesday.

The sector's largest constituent provided little hope of an end to this year's brutal property share sell-off in its first quarter trading update as it said progress on asset sales and lettings had slowed amid challenging market conditions.

Land Securities shares, which have tumbled more than 44 percent in the last 12 months, were trading flat at 1,155 pence by 8:52 a.m., broadly in line with the FTSE 350 Real Estate Index .FTNMX8370, which slumped below its lowest level in around four years on Tuesday.

"We believe that occupier reaction to economic conditions will be the key factor in determining property performance over the next 12 months," said Francis Salway, Group Chief Executive of Land Securities.

"We are realistically cautious...the volume of capital and leasing market activity has certainly thinned," he said.

The company, which owns commercial properties worth more than 14 billion pounds, did not provide details of net asset value in the update but said it had completed 67.2 million pounds of property sales during the last three months at prices 0.2 percent below March 2008 valuations.

The amount of vacant space in its portfolio also increased marginally to 3.5 percent from 3.4 percent on a like-for-like basis.

Inflation blighted consumer spending in June but Salway said the company continued to see demand for good retail warehouses and shopping space at premium locations.