(LAND.L) Land Securities Group PLC Buy/Sell

By Daryl Loo

LONDON, Nov 5 (Reuters) - Europe's largest listed industrial landlord, Segro, said on Thursday new enquiries for space continued to fall in the third quarter, although early signs of recovery have emerged.
"It's all a bit fragile still. We have seen since the end of the summer break enquiries that have been encouraging ... but I'm certainly not getting carried away," Chief Executive Ian Coull said in a conference call.
"There will continue to be pressure on enquiry levels and rents, because the general economic conditions have not completely turned around," he added.
By 0920 GMT, shares of Segro were down 2.9 percent, against a 1.4 percent fall in the UK property stocks index.
The company, which now has about two-thirds of its property portfolio in the UK and the remainder mainly in France, Germany and Belgium, said over the medium term it will focus on reducing the vacancy rate of the Brixton portfolio.
Segro, which took over indebted UK rival Brixton in August giving it a combined property portfolio worth 5.5 billion pounds ($9 billion), said its vacancy rate excluding Brixton's portfolio improved to 10.9 percent, from 11.3 percent.
Including Brixton, Segro's overall vacancy rate at end-September was 14 percent, it said.

With economic conditions across the UK and Continental Europe expected to remain demanding for some time to come, Segro said it plans to manage its business on a very prudent basis.
"The company deserves to be rewarded for its audacious acquisition of Brixton but the real estate cycle is not being shaped by micro or even macro drivers, but by government stimulus," Nomura property analyst Mike Prew said.
UK commercial property values staged the strongest rise in more than three years in September, after plunging 44 percent from their mid-2007 peak to hit bottom in July 2009, Investment Property Databank (IPD) data showed last month.
"We are ... encouraged UK capital values seem to have shown early signs of stabilisation and Continental Europe appears unlikely to suffer the same level of declines that we have seen in the UK," Coull said.
Segro said disposals totalled 285 million pounds in the first nine months of this year at an average initial yield of 8.4 percent.
The company currently has no plans for new equity issues to bolster its balance sheet or plot new acquisitions, after two rounds of fund raising earlier this year, Coull said.
Its UK peers Grainger and Quintain both unveiled rights issues earlier Thursday, proposing to raise 441 million pounds in total.

(Editing by Sinead Cruise and Andrew Macdonald)

($1=.6071 Pound)

(See www.reutersrealestate.com for the global service for real estate professionals from Reuters) Keywords: SEGRO RESULTS/ (daryl.loo@thomsonreuters.com; +44 (0)207 542 5228; Reuters Messaging: daryl.loo.reuters.com@reuters.net)

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