SLOUGH ESTATES yesterday curtailed its plans to start construction on about 1.9 million sq ft of new offices during 2004, blaming weaker than expected market conditions.
The property company has dropped its building plans for this year by 16 per cent, to 1.6 million sq ft of new offices, because of lower than anticipated demand during the first half of the year.
However, Ian Coull, chief executive, added that demand had improved during the past few weeks, and that the company hoped to reaccelerate its construction programme later this year.
Slough Estates also revealed plans to sell about $200 million (£110 million) worth of surplus properties in the US. The sell-off will leave its US business focused on its $1 billion portfolio of property healthcare assets.
Some property analysts had hoped the company would instead pursue the more radical approach of spinning off some of the US assets into a real estate investment trust. But Mr Coull insisted the sell-off was the best available strategy for the company.
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Slough Estates also plans to sell off its £560 million retail property portfolio. Earlier this week, the company announced a prospective deal with Land Securities, the UK’s largest quoted property group, which is thought to involve the exchange of four of its shopping centres for about £250 million of Land Securities’ industrial assets.
The deal would leave Slough Estates with about £300 million in retail properties — including its 50 per cent stake in the Buchanan Galleries shopping centre in Glasgow, worth about £150 million — which it is likely to sell within 18 months.
Slough Estates yesterday reported a 5.3 per cent rise in underlying net asset value a share to 532p. Pre-tax profits rose 6.1 per cent to £76.2 million, beating analysts’ expectations.