Regeneration: meeting needs
in a changing environment
Introduction
1 income affect demand for property. For example, if the economy is
Land Securities is the UKs largest property company by market
capitalisation. It is a public limited company and is included in
the FTSE 100. It owns approximately 8 billion of retail, office and
industrial space in the UK. Its activities include developing
property and renting it out to a range of different occupiers. The
vision of the company is to be recognised as the UKs leading
property company through becoming a one stop shop for
commercial accommodation and property related services for its
customers. In this way Land Securities aims to achieve its objective
To succeed Land Securities must forecast external changes and plan
of creating sustainable returns for its owners - the shareholders.
accordingly.
Land Securities property portfolio
2
Central London
Shopping centres
Offices
Shops
Land Securities
Industrial and Out of town
warehouse premises retail parks
Success in the property market inevitably requires large sums of
money for investment, to buy land and develop buildings. In 2003
Land Securities is split into three different business units, each meeting
Land Securities had an investment portfolio of over 259 properties
the particular requirements of its customer group. These units are:
and a 2.2 billion development programme with over 30
development projects either underway or being planned. The
company owns or manages over 10 million square metres of
property - the equivalent of over 1,500 football pitches - and has
both private and public sector customers.
The property market is particularly sensitive to external influences;
these can be categorised using SLEPT analysis (Social, Legal,
Economic, Political and Technological factors):
Social factors: demographic factors affect the number of
families in the UK and demand for housing whilst changes in
shopping and eating out patterns affect where Land Securities
customers such as hotels, shops, cafs and supermarkets want
to locate.
Legal factors: factors such as the willingness of local councils to
give planning permission and government building regulations
affect how and where Land Securities can develop property.
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Economic factors: factors such as interest rates, inflation and national Each of these three business units is overseen by the Land Securities
Group. The Group agrees the overall strategy of the business and
booming, firms will often want bigger premises leading to more develops the companys business plan. It agrees the funding
requirements of each separate unit, approves individual projects and
demand and higher purchase prices, rentals and asset values.
determines the Human Resources, Information Systems and
Political factors: government policy such as the desire by the
communication policies for the business as a whole.
government to regenerate city areas will affect the subsidies
available and the tax rates.
Technological factors: developments in technology will affect the
Focus on development
design and look of properties as well as the costs of building and side of the business
3
maintenance.
The development business unit at Land Securities develops and re-develops
sites that it rents out, either as a whole or in small units, to other
businesses. Land Securities understands that land is a resource that has
a limited supply but by developing and re-developing existing land it
increases the amount of usable property available to meet its clients
Company structure needs and create financial returns to its shareholders. The aim of Land
Securities development unit is to find and develop the right properties
for different customer requirements. This involves effective business to
Land Securities Group PLC Board business marketing; understanding what other organisations need and
providing it in a way that adds value for both sides perhaps because of
its location, facilities or design. Customer requirements will, of course,
Investment Committee change over time. For example, in retailing there has been a movement
towards out of town retail parks and so Land Securities has to find
Group Functions Group Chief Executive Senior Executive Group
appropriate locations and develop the land for these types of
developments. By providing the right kind of development in the right
Land Securities place, at the right price, Land Securities can provide a good service
Land Securities Land Securities
Portfolio while also increasing its own profits and rewards for its shareholders.
Management Development Trillium
Portfolio Management:
This part of the company acts as a landlord and rents out property
to customers e.g. office space in central London and retail space at
the White Rose shopping centre in Leeds.
Development:
This business unit manages the development of new sites and
buildings or the re-development of existing buildings, which includes
the companys major, long-term project at Kent Thameside.
Land Securities Trillium:
This part of the company owns and manages buildings on behalf of
customers who occupy them. It offers a full range of services
including providing reception staff, maintaining the buildings and
even changing the lightbulbs! Clients include the Department for
Work and Pensions (DWP), BBC and BT. This type of service allows
the occupiers who are using the buildings to focus on their core skills
while Land Securities provides support activities to ensure the
buildings are fully functional. Land Securities Trillium manages over
7,400 properties for clients covering over 8 million square metres.
EDITION
9
 Market segments Urban regeneration
The development unit focuses on distinct markets segments: Forecast economic influences 4 Glossary
Regeneration programmes are needed because of the decline of various
a) Central London offices industries such as coal and steel in parts of the UK. As factories and
London is the financial centre of the UK and hugely important in many Balance sheet: This is a financial document that shows what a
Estimate business requirements for property businesses have closed down this has led to fewer jobs and lower
sectors such as insurance and banking. Demand for land in the city is business owns (assets) and what it owes (liabilities) at a particular
incomes. Declining prosperity has affected the quality of services
very high and given the limited supply of available space this leads to moment in time.
available and has deterred other businesses from locating there - leading
high rentals. The requirements of customers wanting to locate in central London can to a downward spiral. Eager to help these areas recover, the government
include: Brownfield sites: This is any site that has previously been used
Total Office Occupancy Costs has encouraged and financed urban regeneration programmes. These
prestigious buildings in good locations in the City or West End involve a comprehensive and co-ordinated approach to solving problems
or developed but is not currently in use e.g. empty factory space.
Rank City Costs per workstation because they feel this reflects the brand values of the company caused by the decline of manufacturing and primary industries in these
( p.a. 2004) good transport links so staff and visitors can access the property areas. Urban regeneration includes economic, physical, social and Business to business marketing: Land Securities does not deal
easily and reduce commuting time environmental initiatives and policies designed to bring jobs, businesses with the general public. Its clients are business customers and so its
1 London (West End) 9,037.00
a good quality environment to make working in the buildings a and households back to specific regions in the UK. marketing activities are known as business to business marketing.
2 Paris 8,505.00 more positive experience and help to attract and retain staff
3 Frankfurt 7,622.00 strength of London as a global financial and business centre. Economic influences: These are economic factors that can
4 London (City) 7,304.00 affect a firms demand and costs such as interest rates, national
b) Retail development income and taxation rates.

The Times Newspaper Limited and MBA Publishing Ltd 2004. Whilst every effort has been made to ensure accuracy of information, neither the publisher nor the client can be held responsible for errors of omission or commission.
5 Tokyo (Central 5 Wards) 7,013.00
This part of the development unit involves the regeneration of several
6 New York City (Midtown) 6,972.00 of the UKs major city centres such as Birminghams Bullring shopping FTSE 100: This is an index that measures changes in the share
7 Munich 6,101.00 centre. With increasing incomes in these areas consumers are no longer prices of the largest 100 companies in the UK.
8 Washington D.C. 5,442.00 satisfied with run down shops and a lack of places to eat and drink.
They want modern facilities with plenty of choice and good quality Greenfield area: A previously undeveloped piece of land often in
9 Toronto 5,291.00
services. Regeneration has brought bars, clubs, restaurants, cafs, better a rural area.
10 Dublin 5,195.00 shopping facilities and infrastructure.
11 Stockholm 5,174.00 Legal influences: This refers to legislation that affects the success
12 Amsterdam 4,947.00 of a business e.g. laws that prevent/insist on building in certain areas.
13 New York City (Downtown) 4,924.00
14 Edinburgh 4,801.00 Market capitalisation: The market value of a company;
The regeneration of an area can lead to:
calculated by the market price of a share multiplied by the number
15 Milan 4,751.00 improved quality of life and a better environment in which to live of shares issued. Its value will change regularly as the share price
and work
changes.
Source: DTZ Research greater prosperity for the area as consumers spend more money in
the area (rather than spending somewhere else)
Profit and loss account: This shows a firms income and costs
However the level of demand cannot be guaranteed and will vary with more employment in the service sector e.g. in hotels, bars and cafs.
external factors such as the state of the economy and business over a given period of time (usually a year).
confidence. In a recession or time of economic uncertainty, for Effective regeneration programmes bring prosperity back to an area
example, demand for property may be lower leading to lower rentals as making it much more attractive in which to live and work and providing Public limited companies: Organisations that are owned by
has been the case in Central London since 2002. Land Securities much more employment. shareholders and have their shares quoted on the Stock Exchange.
therefore has to forecast demand based on a prediction of economic As a plc, organisation must produce a detailed annual report of
influences; from these forecasts it develops its own plans to buy and c) Kent Thameside The regeneration of an area where Land Securities owns land can accounts and activities and must hold an annual general meeting
develop property. Property prices have become very high in the South East due to the benefit the company by increasing: where shareholders can vote on resolutions put to them by the
rapid growth in demand for homes and offices. In particular there has the value of the land that it owns in its area. This property will be Board.
been an increase in demand for housing because of the growth in the listed as an asset on its balance sheet
number of families wanting their own homes. However local councils its revenue from the rental on these properties because of higher Public sector organisations: Organisations owned by the
have refused planning permission to firms wanting to build in demand to locate in this area. The rental income will show up on the government rather than by shareholders.
greenfield areas. To overcome these restrictions, firms such as Land profit and loss account.
Securities have developed brownfield sites and have gained Resources: Inputs into a business. Land is a scarce resource
permission to build mixed use facilities (e.g. housing and offices). Conclusion because there is a limited amount of it.
One such ongoing development is the huge area of Kent Thameside 5
where Land Securities has developments planned that cover more than Land is an essential resource to organisations but to be useful it has to
1,000 acres and include 10,000 new homes and 300,000 square metres be in the right place and have the right facilities. Land Securities aims
of commercial accommodation. The government supports this type of to accurately anticipate customer requirements and provide flexibility For more information about Land Securities please browse:
regeneration that is re-developing urban areas rather than allowing in terms of the extent to which it manages the property. The desire by
building in locations that were previously undeveloped. This saves the the government to protect the countryside and improve the facilities and
countryside and also reduces the number of people commuting to work quality of life in certain city areas have created major regeneration www.landsecurities.com
in the cities and the consequent pollution. projects which Land Securities is actively involved.

EDITION

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