Respect innovation excellence integrity customer service Presentation to UKSA 19 January 2005 Francis Salway Group Chief Executive.

respect

innovation excellence

integritycustomer service

Presentation to UKSA 19 January 2005

Francis SalwayGroup Chief Executive

Focused business model

…with scope for opportunism

Retail Property outsourcing

London offices

Urban community

development

Retail£4.8bn assets

£257m net income

London offices£3.3bn assets

£200m net income

Property outsourcing£1.9bn operating properties

£196m operating profit(1)

Three core businesses

Market leading positions

(1) Six months to 30 September 2004 annualised, excluding profit on sales of properties

Strategic focus on value creation

Aiming to deliver enhanced financial returns

Effective recycling of capital

£mActive management of balance sheet

2004

2003

2002

2001

2000

1999

1998

£m

Telereal disposals Property investment expenditureDisposals LS Trillium acquisitions

Capital returnsCorporate acquisitions

Recycling capital to achieve higher returns

Richard Akers (43) Managing Director, Retail

Mike Hussey (39)Managing Director, London

Mark Collins (48) Chief Operating Officer

Ian Ellis (49)Property Outsourcing

Andrew Macfarlane (48)Group Finance Director

Francis Salway (47)Group Chief Executive

Experienced management team

Leading a group of 1,950 employees

The last 12 months

2004

Organisational restructuring

Exit from industrial

Debt restructuring

Innovative financing solution

Retail

Scottish Real Estate Limited Partnership – joint venture with British Land

Metro Shopping Fund Limited – joint venture with Delancey

Asset swap with Slough Estates

Successful anchor tenant lettings for shopping centre developments in Exeter and Cardiff

High level of activity

The last 12 months

2004

London office

Let, disposed or agreed terms for letting for over 145,000m2 of our London office development programme

Landflex roll-out

LS Trillium

3 new contract wins – Employment Services, Norwich Union and Barlcays Bank

Strong profit and loss contribution

High level of activity

Financial highlights6 months to 30 September 2004

Key statistics

Pre-tax profit £196.6m 8.2%

Revenue profit (pre-tax) (1)£189.3m 13.4%

Adjusted diluted earnings per share (2) 28.56p

11.8%

Dividend per share 10.40p 5.1%

Property investment business valuation change £445.7m 5.3%

Adjusted diluted NAV per share(3)(4) 1443p 8.4%

(1) Excludes FRS3 profits and exceptional items.(2) Based on revenue profits. Excludes deferred tax on investment properties.(3) Adds back deferred tax on investment properties and Telereal deficit(4) Compared to 31 March 2004

Strong growth in adjusted EPS and NAV

Investment Active management creating value

Shopping centres +6.2%(1)

Retail warehouses +7.3%(1)

Innovative asset acquisitions 18 shopping centres, 25 retail parks Over one million m2 of retail

accommodation Nearly 300 million shopper visits per yearDevelopment Meeting targets on development lettings Planning consent for over 100,000m2 of

retail development(2)

Estimated future development spend of c.£531m(2)(3)

Retail

Retail

(1) Valuation change for six months to 30 September 2004(2) LS share(3) Excludes land costs and capitalised interest

Vision of long term, dominant assets

Scottish Retail Property Limited Partnership

Joint venture with British Land created in March 2004

Over 130,000m2 of retail space, valued at circa £500m

Assets: Aberdeen - Bon Accord Centre and St

Nicholas Centre East Kilbride – Princes Mall, Olympia,

Plaza Centre and Centre West Roles:

Land Securities – asset and property management

British Land – administration Rationale

Coordinated asset management and tenant mix strategies

Future development opportunities

Maximise long-term value of centres

Centre West, East Kilbride

• Long leasehold at peppercorn

• £3.8m p.a. rental income

• 21,350m2

• Freehold

• £1.9m p.a. rental income

• 9,500m2

Howard Centre, Welwyn Bishop Centre, Taplow

• 50% interest with Henderson

• Long leasehold at peppercorn

• £8.3m p.a. rental income (LS share)

• 55,750m2

• Freehold

• £6.4m p.a. rental income

• 32,500m2

Buchanan Galleries, Glasgow Lewisham Centre, Lewisham

Asset management and development opportunities

Assets acquired through Slough Estates swap

Retail developments

Princesshay, Exeter37,500m2 retail

St David’s 2, Cardiff(1)

70,000m2 retail

Broadmead, Bristol(1) 88,750m2 retail

One of the largest development pipelines

Whitefriars, Canterbury37,100m2 retail

Investment Disposal of ‘ex-growth’ assets Valuation increase(1) +4.4% Like-for-like portfolio(2):

Average passing rent £358 per m2 Average estimated

rental value £321 per m2

Current income yield 7.1%

Over 810,000m2 of office accommodation More than 50,000 people work in offices owned

by us

Development Strong progress on development lettings Potential to develop 500,000m2 of commercial

and residential space over next 10 years Estimated future development spend of c.

£581m(3)

Retail

Central London office

(1) for six months to 30 September 2004(2) As at 30 September 2004(3) Excludes land costs and capitalised interest

Poised for market recovery phase

London investment portfolio opportunities

Current income yield 7.1% Gross nominal equivalent yield 7.1% Average passing rent per m2 £358 Average ERV per m2 £321

London offices (like-for-like portfolio) as at 30 September 2004:

Property A – long lease Property B – short leases

Mean lease length 9.0years Gross reversionary potential 7.8% Over-rented income (14.3)%

Capital value Rental value

60

70

80

90

100

110

Mar-01 Mar-02 Mar-03 Mar-04

60

70

80

90

100

110

Mar-01 Mar-02 Mar-03 Mar-04

Positioned for capital growth

Office developments

Cardinal Place, SW1

Bankside 123, SE1

New Street Square, EC4

Can satisfy major occupiers’ property requirements

Eastbourne Terrace, W2

120 Cheapside, EC2

Landflex

ClientLandSecurities

Higher earnings from capital invested

Increased renewal rates

Improved IRRs

Menu of lease lengths

Indexed rent increases

Inclusive charges

No dilapidations

Additional services

Budget certainty

Product innovation matched to market trends

Building Office space Status

7 Soho Square, W1 41,000m2 Let

Empress State, SW6 5,720m2 Let

Eastbourne Terrace, W2 7,640m2 Under development

Property outsourcing

ClientLSTrillium

Freehold asset transfer

Leasehold liability transfer

Unitary charge

Capital value payment/release

Integrated property services

Occupational flexibility

Price certainty

Property outsourcing: risk transfer, price certainty, customer service

More than 250,000 people work in offices managed by LS Trillium

2.6m m2 = 1,700 buildings

0.4m m2 = 76 buildings

5.3m m2 = 6,700 buildings

0.1m m2 = 19 buildings

Property outsourcing

6 months to

30/09/03£m

31/03/04£m

30/09/04£m

Segment profit including profit on sales

PRIME (including amortisation of goodwill) 27.6 29.6 29.1

ES (1.8) (4.4) 17.2

BBC (3.4) 10.0 10.5

Norwich Union - - 2.9

Bid costs (1.7) (4.5) (0.7)

Central costs (3.2) (4.1) (1.9)

Segment profit 17.5 26.6 57.1

Telereal profit before tax 16.4 13.9 37.7

Net assets(1) 746.7 889.6 960.0

Investment in Telereal joint venture 89.0 (47.9) (52.6)

(1) Including £36m Norwich Union assets defined as finance leases

Strong growth from new contracts

LS Trillium - new business pipeline

Corporates Public Sector

2

5

1Final proposal

Outline proposal

Marketing and pre-proposal

Final close

Mobilisation

7

1

2

Balance sheet Consolidation Government efficiency review

Flexibility Cost reduction £30 billion asset disposals

Drivers:

Growing private sector interest within pipeline

1 0

(1) Eastern Quarry 79% ownership Outline planning application submitted 7,250 homes, 267,250m2 commercial and community accommodation

(2) Ebbsfleet 42.5% ownership Outline planning consent obtained 789,500m2 commercial and residential floorspace

(3) Springhead, Ebbsfleet phase I 42.5% ownership Quarter Master approval secured 600 homes and 50,000m2 offices

(4) Swanscombe Peninsula Development management role Outline planning application to be submitted 1,700 residential units, 25,000m2 offices and 6,000m2 retail and community accommodation

Urban community development

Kent Thameside, south-east England

London

SevenoaksBexley

Maidstone

Brentwood

Thurrock

Kent Thameside

4

3

2

1

Exciting opportunity – delivering profits over 20 years

Effect of debt refinancingBased on final pricing

Before After

£1.80bn debentures and bonds £2.30bn secured bonds

weighted average interest rate: 8.51% weighted average interest rate:

5.35%

A/A- rating (bonds only) AA/AA rating

£1.55bn committed unsecured facilities expiring 2005 & 2006.

New £1.5bn committed bank facility expiring late 2009. Bank debt has migrated

At 30 September 2004 :At 30 September 2004 pro-forma for transaction(1):

Gearing (net debt/equity) 40.7% Gearing 54.7%

Adjusted diluted NAV 1443p Adjusted diluted NAV 1342p

NNNAV 1228p NNNAV 1223p

Group weighted average cost of debt 7.64% Group weighted average cost of debt 5.52%

(1) As if refinancing had happened at 30 September 2004 but based on final prices

Improved flexibility with lower future funding costs

Summary

Sharper focus to range of activities

More efficient debt structure – earnings enhancing

London portfolio well positioned for recovery phase:

short average lease lengths

development pipeline

Retail portfolio strengthened through organic growth

Increasing interest in property outsourcing from private sector

A strategy delivering growing returns

Contacts

Emma Denne Jennifer van der EemDirector of Corporate Communication Investor Relations ManagerTel: +44 (0) 20 7024 5460 Tel: +44 (0) 20 7024 5185Fax: +44 (0) 20 7024 5011 Fax: +44 (0) 20 7024 5011Email: [email protected] Email: [email protected]

www.landsecurities.com

Land Securities Group PLC, 5 Strand, London, WC2N 5AF

respect

innovation excellence

integritycustomer service

Robert HeskettHead of Asset Management, Central London portfolio

UKSA Central London Tour 19 January 2005

One New Change, EC4

Description

The building comprises 385,000ft2 of offices and 26,000ft2 of retail held on a long lease from the Corporation of London. The majority of the office building is let to Allen & Overy, who will occupy the premises until 2006. The retail accommodation is let to a mixture of tenants, including Lloyds Bank and Boots.

Comment

Land Securities purchased New Change from the Bank of England during 2000 and provides the opportunity to develop a substantial landmark building adjacent to St Paul’s, with the ability to create the first major shopping complex on the City’s most prime retail frontage.

30 Gresham Street, EC2

Description

Gresham Street is one of the City’s largest buildings providing approximately 390,000ft2 net of offices with floor plates up to 49,220ft2, offering exceptional levels of flexibility to high density occupiers. In addition, the scheme will provide approximately 14,000ft2 net of retail accommodation.

Comment

The scheme was completed in December 2003. The property stands on an island site providing a high profile frontage onto Gresham Street. The building was recently let in its entirety to DrKW, thus releasing their Fenchurch Street site to Land Securities.

Red Lion Court, SE1

Description

This is a 128,325ft2 building of high quality specification with full air-conditioning and raised floors. The building is wholly let to Lloyds TSB Bank PLC for a term of 25 years from June 1990, expiring June 2015, on FRI terms and five yearly rent reviews.

Comment

Land Securities purchased the property in December 2004. The building is let off a rent of £35ft2 and rental growth prospects are good, bearing in mind the improvements in the South Bank area. The value is underpinned by the possibility of a residential development in a popular riverside location.

Bankside 123, SE1

Description

A mixed use development providing approximately 750,000ft2 net of offices, 110,000ft2 net retail and health and fitness, arranged over 3 buildings. Bankside neighbours the Tate Modern and is well connected to a number of transport hubs providing access to the City, West End and Docklands.

Comment

The building has been demolished and, as a result of the early pre-letting campaign, Bankside 1 has been pre-sold to IPC. Tenants are being sought for the remainder of the space before construction starts.

Hill House, 1 Little New Street, EC4

Description

This is a building comprising 133,260ft2 plus car parking let in its entirety to Deloittes. The terms of the lease is 35 years from 1983, expiring in 2018 at a rent of c. £38ft2 per annum exclusive.

Comment

Land Securities purchased the freehold interest in this building in July 2004. The attractive running yield of 6.5% made this an attractive acquisition adjacent to the company’s existing holdings in New Street Square and based on a first class covenant.

New Street Square, EC4

Description

Planning permission for a 700,000ft2 scheme on the site of New Fetter Lane was submitted in 2004.

Comment

After carefully considering current market trends, Land Securities has now made a planning application for the site which will involve 3-4 buildings of between 150,000ft2 and 400,000ft2 each. A pre-letting marketing campaign is underway and Heads of Terms have been agreed with Deloittes to take over 200,000ft2, although it is not yet documented.

Greater London House, NW1

Description

This is a landmark 335,000ft2 building between Camden and the West End. Major occupiers include Book Club Associates, Young & Rubicam and TUI. The building is fully occupied with most leases expiring in 2013.

Comment

Land Securities purchased the freehold interest in this building in July 2004. Average rents are c. £23ft2 and the rental growth prospects are strong for this popular building.

6-17 Tottenham Court Road, W1

Description

A development completed in 1999 and comprising 56,500ft2 of retail space currently divided into six large units let to a variety of tenants, including Sainsbury’s, Boots the Chemist and Specsavers. There is also a restaurant and some offices.

Comment

A new development providing good quality retail space, which is in short supply generally in the West End. The parade shows good rental growth prospects which should be reflected in the rent reviews in 2004, which are being progressed at present.

Piccadilly Circus, W1

Description

Seven advertising screens let to international brands, such as Coca-Cola, McDonald’s and TDK. Two large ground floor retail/restaurant units let to Boots the Chemist and Burger King.

Comment

A multi-let building in the heart of the West End. The signs have attracted household names for almost a century and the block continues to be popular with retailers and advertisers.