Interim Results

Land Securities PLC
14 November 2001

14 November 2001

PRESS RELEASE


PART 1

Land Securities PLC ('Land Securities')


Interim results
for the six months ended 30 September 2001



HIGHLIGHTS



*         Pre tax profits up 12.6% to £168.6m (30/9/2000: £149.8m)

*         Adjusted earnings per share increased by 9.7% to 22.85p from 20.83p

*         Since 31 March 2001 adjusted diluted net assets per share are steady
          at 1159p, a 0.4% increase

*         Since 31 March 2001 portfolio valuation like-for-like down 0.4% but
          rental values are up 1.3%

*         Property disposals are £195m and acquisitions, including those since
          30 September, are £218m - further sales anticipated in second half

*         In central London resolutions to grant planning permission received
          for two office developments totalling 102,000 sq m.

*         Land Securities Trillium secured BBC contract and White City
          redevelopment underway.

Peter Birch, Chairman, said 'Although economic conditions remain uncertain,
interest rates are at a long term low in the UK, making property yields
attractive for investors.

We believe that this will be the case for some time to come. At Land
Securities we are in good shape with a strong balance sheet, a diversified
portfolio and a modest level of gearing.  We will continue to explore actively
growth opportunities in the future.'



For further information:
Ian Henderson/Andrew Macfarlane/        Stephanie Highett/Dido Laurimore
Emma Denne                              Financial Dynamics

Land Securities PLC                     020 7831 3113

020 7413 9000



Financial Highlights

                                                     Six months
                                         Six months       to 30
                                              to 30   September
                                          September        2000
                                               2001  (restated)        % change
                                         ----------   ---------      ----------

      NET PROPERTY INCOME                   £281.1m     £232.8m           +20.7
*     REVENUE PROFIT
      (PRE-TAX)                             £165.2m     £149.4m           +10.6
      PRE-TAX PROFIT                        £168.6m     £149.8m           +12.6
+     ADJUSTED EARNINGS
      PER SHARE                              22.85p      20.83p            +9.7
      EARNINGS PER SHARE                     23.18p      19.85p           +16.8
      INTERIM DIVIDEND PER
      SHARE                                   9.05p       8.65p            +4.6
£     INTEREST COVER
      (times)                                   3.0         3.1


                            As at 30 September 2001    As at 31
                                                     March 2001
                                                     (restated)        % change
                                         ----------   ---------      ----------
**    ADJUSTED DILUTED NET
      ASSETS PER SHARE                        1159p       1154p            +0.4
      DILUTED NET ASSETS
      PER SHARE                               1138p       1131p            +0.6
      VALUATION OF
      INVESTMENT
      PROPERTIES                          £7,894.3m   £7,899.1m
      NET BORROWINGS                      £1,895.8m   £1,727.8m
      EQUITY SHAREHOLDERS'
      FUNDS                               £6,069.6m   £6,027.4m
      GEARING (net)                           31.2%       28.7%

££    TOTAL PROPERTY
      RETURN                                   5.6%       10.6%


The comparative figures for the six months ended 30 September 2000 have been
restated for the effects of adopting the Accounting Standard Board's Urgent
Issues Task Force Abstract 28 (Operating Lease Incentives) and Financial
Reporting Standard 19 (Deferred Tax).

Land Securities Trillium was acquired in November 2000. Results for the period
to 30 September 2001 therefore includes six months trading for that business.

*    Excludes results of property sales and bid costs
+    Excludes results of property sales, bid costs and additional
     deferred tax arising on adoption of FRS19 (Note 8)
**   Excludes the effects of additional deferred tax arising from
     adoption of FRS19
£    Number of times interest payable is covered by operating profit
     and interest receivable
££   Annualised for six months to 30 September excluding LS
     Trillium, compared with year to 31 March 2001


VALUATION

Portfolio valuation                     £m          Total%          Analysis of
At 30 September 2001                                                  valuation
                                                                       surplus/
                                                                    (deficit) %
                                  --------        --------             --------
OFFICES
WEST END AND VICTORIA              1,939.2            24.5                (1.0)
CITY AND MIDTOWN                   1,469.6            18.6                  0.5
ELSEWHERE IN THE
UNITED KINGDOM                       143.3             1.8                (1.3)

SHOPS AND SHOPPING
CENTRES

SHOPPING CENTRES                   1,375.5            17.4                (1.8)
CENTRAL LONDON SHOPS                 663.4             8.4                (0.6)
OTHER IN-TOWN SHOPS                  660.2             8.4                (0.4)


RETAIL WAREHOUSES AND
FOOD SUPERSTORES

PARKS                                753.6             9.5                  0.6
OTHER                                195.8             2.5                  0.4
WAREHOUSES AND
INDUSTRIAL                           374.3             4.7                  1.3
HOTELS, LEISURE,
RESIDENTIAL AND
OTHER                                329.2             4.2                  0.9
TOTAL VALUATION                    7,904.1           100.0                (0.4)


The portfolio valuation figures given above relate to investment and
development properties. The figures exclude properties owned by Land
Securities Trillium. The portfolio valuation figures include a one third
apportionment of the valuation attributed to properties owned by the
Birmingham Alliance limited partnerships and a one half apportionment in
relation to property owned by the Gunwharf Portsmouth limited partnership and
by the Ebbsfleet limited partnership.

The investment portfolio was valued by Knight Frank at just over £7.9bn at 30
September 2001. After adjusting for sales, acquisitions and expenditure, on a
like-for-like basis, the value decreased marginally by 0.4%. Detailed
breakdowns by sector, including analysis of the rental income yield, are shown
above and in the sections below. After excluding developments and
refurbishments and other vacant pre-development holdings, the value of the
portfolio at 30 September 2001 was £7.28bn. At the same date, the annual rent
roll, net of ground rents and excluding the same properties, was £499.3m, 6.9%
of this figure.

The six month period to 30 September 2001 was characterised by slowing rates
of rental growth, but an ongoing resilience of demand for property from
investors. The pattern of slowing rates of rental growth across all property
types has resulted in there being no material differences in valuation change 
across the main property types.

Taking the portfolio as a whole, the trend in rental values continues to be
positive. However, rates of rental growth have been significantly below those
seen in 1999 and 2000, and we have witnessed a slight reduction in rental
value on a small number of our holdings including some West End offices and
hotels.

Investor demand for property continues to be supported by the high income
yield relative to both interest rates and yields on other types of investment.
There has been less depth of demand from buyers than in 1999 and 2000, but the
level of turnover of investment properties in the market has continued at high
levels.


% RENTAL VALUE GROWTH
By sector for
6 months to
30 September 2001


OFFICES                                                                     1.8
SHOPS AND SHOPPING
CENTRES                                                                     1.1
RETAIL WAREHOUSES AND
FOOD SUPERSTORES                                                            1.2
WAREHOUSES AND
INDUSTRIAL                                                                  1.6
HOTELS, LEISURE,
RESIDENTIAL AND OTHER                                                     (4.3)

INVESTMENT PORTFOLIO                                                        1.3

=====================                                              ============

% YIELD ON PRESENT
INCOME
By sector for
6 months at
30 September 2001


OFFICES                                                                     7.1
SHOPS AND SHOPPING
CENTRES                                                                     6.8
RETAIL WAREHOUSES AND
FOOD SUPERSTORES                                                            5.9
WAREHOUSES AND
INDUSTRIAL                                                                  7.7
HOTELS, LEISURE,
RESIDENTIAL AND OTHER                                                       6.4

INVESTMENT PORTFOLIO                                                        6.9
=====================                                             =============

CORPORATE REVIEW

With uncertain, and very different, economic and global conditions to those
which prevailed in May this year, we are pleased to report that revenue profit
before taxation, which excludes the results of selling investments properties,
was £165.2m as compared to £149.4m for the equivalent period last year.

Diluted net assets per share increased marginally to 1138p from 1131p as at 31
March 2001 and adjusted earnings per share increased by 9.7%. Your Board is
declaring an interim dividend of 9.05p per share, an increase of 4.6% over the
interim dividend paid in January 2001. This will be paid on 7 January 2002 to
shareholders on the register on 23 November 2001.

Review of Activity

At the year-end we reported that this year would be a period for the
implementation of new strategies, when we would focus on consolidating the
Group's position as a leading provider of commercial property and property
related services. Over the past six months each of the three business units
has made good progress in meeting their objectives as well as working together
to create an integrated commercial property and property services Group.

We continue to focus the portfolio on four main sectors, central London
offices and shops, shopping centres, retail warehousing and industrial
properties in the south east, where, in the latter case, we are increasing our
holdings.

In order to achieve the right mix of assets where we can exploit asset and
property management skills we are pursuing an active sales and acquisition
strategy. We have disposed of properties for £194.9m and have made
acquisitions totalling £218.1m, including £90.1m after the period under
review. Subject to market conditions it is anticipated that further sales will
be made in the second half of the year, after which the refocusing of the
investment portfolio will be substantially complete.

The portfolio continues to benefit from the security of its underlying income.
An analysis of the portfolio demonstrates the strength of this with 60.5% of
our income secured until 2010, with a substantial amount of the income let to
high quality covenants.

The Portfolio Management team's objective will continue to be the creation of
value within the core investment portfolio by reconfiguring leases and
premises where appropriate to meet occupiers' requirements.

We have progressed the £2bn development programme, which is focused on those
areas where we believe we can derive competitive advantage and exploit our
development skills.

In London, we have received resolutions to grant planning permission for more
than 101,640 m2 of office and retail development, for schemes in Victoria and
Earls Court. We have also now submitted a planning application for St
Christopher House in Southwark SE1.

In Cardiff, we are examining a further opportunity to progress a major urban
regeneration scheme in partnership with Capital Shopping Centres. We continue
to progress retail schemes in locations which we consider to be dominant in
their catchment area. In April 2001 we acquired Whitecliff Properties, which
included the purchase of 290 hectares of land in Kent-Thameside, comprising
one of the largest regeneration schemes in Europe as well as a scheme in
Cambridge. We have successfully integrated this business into Land Securities
Development and are progressing the proposals for these developments.

Our strategy for the development programme is to continue to add value to
holdings through active site assembly and obtaining planning consents. We
remain positive about future opportunities; however, in the light of market
conditions, we continue to focus on risk management and want to be assured of
occupational demand before progressing individual schemes.

We are pleased that Land Securities Trillium (LS Trillium) has concluded
negotiations with the BBC. This property services contract started in November
2001 and we welcome 310 new colleagues from the BBC. The synergies between our
business units are exemplified by this contract, with both LS Trillium and
Land Securities Development working in collaboration with the BBC.

The 50:50 joint venture partnership with The William Pears Group, Telereal, is
in advanced negotiations for the acquisition of BT's portfolio for
approximately £2.4bn. Land Securities share of the equity investment in this
project is not expected to exceed £200m and project financing is being
effected by Telereal on a basis that will be non-recourse to the Land
Securities Group.

These two contracts demonstrate that LS Trillium's product can be applied to a
variety of occupiers. We believe that demand will continue to grow as both
public and private corporations seek to manage their capital more efficiently
and focus on their core business activities. This is even more relevant today
when many corporations are seeking to maintain or reduce their operating costs
and are also examining alternative ways to manage their accommodation needs.
The ability to create tailor made solutions, combined with Land Securities'
development and financial strengths positions the Group at the forefront of
the property outsourcing market.

We are progressing our plans for LandFlex, which we believe will lead the way
in the provision of flexible lease terms for accommodation and services for a
growing segment of the office occupier market. We believe that in the medium
term we have the potential to create over 150,000 m2 of LandFlex office space
in London.

A pilot project will be in operation by the latter part of next year.

We intend to roll out this concept into three existing properties in London,
Empress State Building in Earls Court, 7 Soho Square and Park House in Oxford
Street. We have also agreed terms to acquire a fourth building in Tottenham
Court Road. These four buildings will provide over 55,000 m2 of refurbished
accommodation.

LandFlex demonstrates another way in which the three business units are
collaborating to provide an integrated offer to the modern corporate occupier.

Our People

With the acquisition of LS Trillium and through the BBC property partnership
our employee numbers have expanded substantially, from 495 to 1,405. The
introduction of the new structure announced in May together with additional
skills will considerably widen the opportunities for our employees to develop
their careers.

Board Appointments

As announced earlier this year, Andrew Macfarlane joined the company in
October as Group Finance Director. We are delighted to welcome Andrew who
joined from Six Continents PLC (formerly Bass plc).

Outlook

With a new draft voluntary Code on leases, we are pleased that we may not be
facing further legislation on an over-regulated industry. Property as an asset
class is already unfairly penalised as compared to bonds and equities and this
additional legislation would have continued to erode its attraction to
investors, many of whom are already looking at ways of holding their property
assets in more efficient vehicles.

Over the past two years we have consistently highlighted the threats facing
London as one of the world's leading financial and cultural centres. Once
again we reiterate our belief that London's position is being eroded by the
continued lack of investment in its infrastructure, particularly in its
transport system. This has resulted in London being unable to meet the
standards expected of a world-class City.

These issues are being aggravated by the sharp drop in tourism following the
events of 11 September and the rationalisation of staff in major financial
institutions. While these matters are now high on the agendas of both national
and regional government, the time for action is long overdue if we are to
ensure that London's position as a major generator of wealth for this country
is not impaired.

We remain hopeful that the UK economy will escape the worst effects of global
disruption and that consumer confidence will be maintained.

Although economic conditions remain uncertain, interest rates are at a long
term low in the UK, making property yields attractive for investors.

We believe that this will be the case for some time to come. At Land
Securities we are in good shape with a strong balance sheet, a diversified
portfolio and a modest level of gearing.  We will continue actively to explore
growth opportunities in the future.



PETER G. BIRCH
Chairman

IAN J. HENDERSON
Chief Executive


Portfolio MANAGEMENT

PORTFOLIO VALUATION BY TYPE at 30 September 2001

                                                              £m              %
Offices - Central
London                                                   3,408.8           43.1
Shopping centres                                         1,375.5           17.4
Retail warehouses and
food superstores                                           949.4           12.0
Central London shops                                       663.4            8.4
Other in-town shops                                        660.2            8.4
Warehouses &
Industrial                                                 374.3            4.7
Hotels, Leisure,
Residential and other                                      329.2            4.2
Offices - Elsewhere
in the UK                                                  143.3            1.8

TOTAL                                                    7,904.1          100.0


RENTAL INCOME BY TYPE Six months to 30 September 2001

                                                                             %
Offices - Central
London                                                                     43.9
Shopping centres                                                           17.9
Retail warehouses and
food superstores                                                           10.3
Other in-town shops                                                         9.2
Central London shops                                                        8.2
Warehouses &
Industrial                                                                  5.0
Hotels, Leisure,
Residential and other                                                       3.4
Offices - Elsewhere
in the UK                                                                   2.1
                                                                       --------
Total %                                                                   100.0
Rental income                                                           £262.0m


Activity over the last six months has focused on the continuing
rationalisation of our portfolio. We have sold 23 properties for £194.9m,
showing a net profit (after disposal costs) of £3.5m. The programme of
disposals included 6 London office properties for £81.0m; an office building
in Uxbridge, which was our largest office holding outside London, for £47.5m;
and 9 High Street shop properties for £27.3m. The balance of the sales
programme related to 'solus' retail warehouse and supermarket units together
with some smaller industrial holdings outside our core south east area.

New acquisitions in the retail sector were made in Cardiff and Sunderland to
complement our existing holdings at the St David's Centre in Cardiff and The
Bridges Centre in Sunderland. The acquisition in Cardiff for £24.5m was
particularly significant, consolidating our ownership on the Queen Street
frontage at the same time as we announced a proposal for a major extension to
the rear of the centre.

During the six month period under review, we also completed the purchase of
two London office properties. 10 Rood Lane in the City adjoins one of our
major holdings fronting Fenchurch Street, and was acquired for £7.9m at an
initial yield of 10.5%. We also acquired a freehold office building of 7,770
m2 at 190 High Holborn, just to the north of Covent Garden for just under £
32m. The building was acquired from an owner-occupier and is subject to a
short leaseback to them prior to being refurbished.

Two of the key determinants of the investment portfolio's contribution to the
company's profits have continued to be positive: void levels on the investment
portfolio have declined even further over the period under review, currently
standing at 0.9%, and rent reviews have, at the aggregate level, been settled
ahead of expectations.

Although there has been comment about the negative pressures on rental values
for shopping centres and High Street shops, we have succeeded in establishing
new rental highs at a number of our centres including the White Rose Centre in
Leeds, our largest shopping centre asset, the Almondvale Centre in Livingston
and the St Johns Centre in Liverpool.

As a result of the constraints on new retail warehouse development arising
from the Government's PPG6 and PPG13 planning policies, retailers are focusing
increasingly on existing retail parks to meet their requirements. This has the
potential to generate strong rental growth provided that landlords can
negotiate lease surrenders to facilitate the new lettings. At Aintree Retail
Park in Liverpool, following on from our extension of the B&Q store, we have
taken back three units to create a 2,790 m2 store for Comet. We have also
agreed a surrender of a 7,450 m2 unit and relet it to SCS Upholstery. Top
rental levels on the park have increased by 31% over the past 12 months and by
45% over 18 months.

At Cheetham Hill in Manchester, we have negotiated the surrender of leases on
three first generation units and pre-let the entire site to the Big W for a
9,275 m2 store at a rental of £140 per m2.

Within our industrial portfolio, activity has focused mainly on new
development schemes in the South East. These are covered briefly in the
Development review.



DEVELOPMENT


We continue to progress our development programme.

In central London we completed the redevelopment of Portman House W1 and 70%
of the offices are let or under offer. At Gresham Street, EC2 construction has
started. This 37,690 m2 building is well located opposite Guildhall and is a
short walk from the Bank of England. The development is scheduled for
completion to shell and core in the summer of 2003. Despite prevailing
economic uncertainties, we believe demand will continue in the City of London
for this type of prestigious office headquarters where supply remains limited.
This is the only speculative development of its size and type which will be
ready for occupation in the City in 2003.

We have received resolutions for the grant of planning permission for two
significant development opportunities elsewhere in London, both of which are
subject to the completion of Section 106 Agreements. The first is for the
redevelopment of Esso and Glen Houses in Victoria Street SW1. The scheme will
provide for 50,170 m2 of offices and 10,060 m2 of retail together with
significant improvements to the surrounding environment.

More recently, just after the period under review, we received conditional
approval for our plans to refurbish and extend Empress State Building in Earls
Court SW6 to provide 40,000 m2 of offices. As detailed in the Corporate Review
this property is one where we intend to introduce the LandFlex concept.
Enabling works are in progress and completion of the project is scheduled for
the summer of 2003.

At New Fetter Lane, EC4 we anticipate that the planning application for 65,310
m2 of offices and 8,180 m2 of retail, leisure and ancillary uses will be
considered by the City Corporation's Planning Committee before the end of this
calendar year.

In October we submitted a planning application for the redevelopment of St
Christopher House in Southwark Street, SE1. The proposals comprise 69,680 m2
of offices in three buildings with 7,990 m2 of retail, leisure and restaurant
uses together with extensive environmental improvements.

While our major office development programme is progressing well we continue
to be hampered by the vagaries of the planning system on our retail schemes in
Exeter and York. At the latter the public inquiry into the scheme, which was
due to take place in September, has been postponed by the Inspector until
January. We are making better progress at Exeter where we have appointed three
architectural practices which are working together, in conjunction with Exeter
City Council, English Heritage and CABE, to revise the proposals for this
44,590m2 scheme.

In Birmingham, the Alliance continues the development of the New BullRing and
is close to completing the Martineau Place scheme, of which 95% is in
solicitors' hands or pre-let to a strong mix of national and international
retailers. The success we have had in letting the Martineau Place development
demonstrates the strength of demand from retailers for dominant locations with
strong catchment areas. We are confident that there is a continuing pent-up
demand from retailers for Birmingham.

In Bristol, discussions with the City Council are progressing for the
redevelopment of the Broadmead area in the City centre. We are working in
partnership with Hammerson, Henderson Investors and Morley Fund Management on
this significant urban renaissance project.

We were also delighted to be invited by Cardiff City Council, in partnership
with Capital Shopping Centres, to develop proposals for a 70,000 m2 retail-led
mixed-use urban regeneration project which will create a dramatic extension to
our existing St David's Centre. The agreement with Cardiff provides for us to
develop our proposals over the next nine months, after which time we hope to
be appointed as the preferred development partners.

Following the completion of the Whitecliff acquisition, we have strengthened
our holdings in Kent-Thameside where we have acquired a 50% interest in a
further 176 hectares of land at Ebbsfleet from Lafarge plc (formerly Blue
Circle Industries) for £13.2m.. We are now progressing plans for the long term
development of this and other land in the area totalling some 623 hectares. At
Crossways, two thirds of the overall development of this 280,000 m2 business
park has been completed, and work has started on our mixed-use development in
Cambridge.

We have a 65,000 m2 retail warehousing development programme including new and
recycled units. The highlights of this programme are covered in the Portfolio
Management Review since it is closely allied to asset management activities.

Our 90,000  m2 south east industrial development programme is being progressed
with lettings ahead of expectations. We have pre-let 20% of the space at
Cobbett Park, Guildford, where construction has just begun and recently
acquired 2.7 hectares at Croydon for development next year.

At 30 September, future expenditure on our committed or potential development
schemes totalled some £1.7bn, most of which will be spent over the next six
years.  This figure excludes the Kent Thameside project which is still in the
early stages of planning, but includes the building we will construct for the
BBC under the LS Trillium contract.

However, as stated in the Corporate Review we remain conscious of prevailing
economic conditions and are closely monitoring each development to ensure that
we respond to fluctuations in occupational demand.

TOTAL PROPERTY SERVICES

BBC Property Partnership

Since our last report to you in May we have made good progress at Land
Securities Trillium ('LS Trillium'). We have entered into our partnership with
the BBC and hope shortly to complete the BT transaction.

In September we successfully concluded negotiations with the BBC. Over the
next 30 years we will provide the Corporation with property development,
financing, a wide range of property services and active estate management. We
have also set up a joint management board to oversee the implementation and
management of the partnership.

We made an initial payment to the BBC of £37m in October which includes the
ownership of the BBC White City building and development site. Land Securities
Development is managing this project which includes the development of 50,400
m2 of new accommodation to include a broadcasting and playout centre and
additional office buildings. This development, which we will finance, will
entail an investment of approximately £240m over the next two years.

Since announcing the partnership we have been working closely with our new
colleagues at the BBC to mobilise the service delivery side of the
partnership. In November 2001, 310 BBC employees transferred to LS Trillium
and its service partners and we are now working together to manage and service
320,000 m2 of accommodation across 65 BBC buildings in Scotland and London.

We will be receiving an annual unitary charge from the BBC initially at a base
of £35m per annum, which will rise to over £70m per annum on completion of the
White City project. This unitary charge is index linked and covers estates
strategy and facilities management. We expect to incur small operating losses
for the first three years of this contract reflecting funding, start-up and
other initial costs. However, the contract will become profitable when the new
buildings are complete.

As the relationship develops with the BBC we look forward to increasing the
scope, and therefore the value, of this project, subject to the approval of
the BBC Board of Governors. Future opportunities include the management of the
remaining BBC estate of approximately 360,000 m2 and the redevelopment of
Broadcasting House, London and the development of new headquarters for BBC
Scotland at Pacific Quay, Glasgow. We are already working closely with the BBC
on its plans for Broadcasting House and Pacific Quay.

Telereal

Telereal's negotiations with BT are at an advanced stage. For the purposes of
this transaction we have set up a joint venture partnership with The William
Pears Group, called Telereal, in which we have equal shares and we will be
investing £200m in this vehicle. Telereal will acquire the majority of the BT
estate, which comprises some 6,700 properties with a total floor space of six
million m2, for a total consideration of £2.4bn. Telereal will finance the
acquisition through a £1.8bn securitisation which is currently in preparation
plus bank debt and equity. The debt will be non-recourse to the Land
Securities Group. Further details of this contract will be announced once the
transaction has been concluded. We believe that Telereal will have many
opportunities to create value in partnership with BT and we are excited by the
prospect of this joint venture.

London Underground Property Partnership

We have been selected as one of the two parties with regard to management of
the London Underground non-operational property estate which includes
potential development opportunities. A formal decision has not been made and
now looks increasingly uncertain, primarily due to the political sensitivities
surrounding the future of London Underground.

The Future

In uncertain economic conditions, both public and private corporations look to
see how they can reduce or maintain costs and budget for future capital
requirements with confidence. We believe that we have the right service in
place to provide property solutions to these organisations to assist them in
satisfying both their property and financial requirements.

We have added the BBC to our client list, in addition to the Department for
Work and Pensions, and are in advanced discussions with BT. This demonstrates
that LS Trillium's service is relevant to both the public and private sectors.
We believe that, as organisations endeavour to extract maximum value from
capital and focus on their core activities, more will consider this route. We
are actively negotiating with a number of both public and private
organisations.

FINANCIAL REVIEW

Revenue profit for the six months to 30 September 2001 increased by 10.6% from
£149.4m to £165.2m. These figures include a full six months contribution from
Land Securities Trillium, which was acquired in November 2000. Excluding LS
Trillium, the increase in revenue profit from property investment was 1.4%
which has been achieved despite the ongoing activity to reposition the
portfolio.

Adjusted earnings per share increased by 9.7% against the comparable period,
from 20.83 p to 22.85 p and the directors have declared an interim dividend of
9.05 p (2000 8.65 p). After taking into account the results of the September
valuation and retained earnings, shareholders funds increased by £42.2m over
the March position and adjusted diluted net assets per share rose by 2.7% to
1159 pence per share. The annualised return on capital employed was 4.5% and
the annualised total return on property investment was 5.6%. These compare
with our estimated pre-tax weighted average cost of capital of 8.4%.

Change of Accounting Policy

We have made two changes in accounting policies in the current period to adopt
the Urgent Issues Task Force Abstract 28 'Operating Lease Incentives' and
FRS19 'Deferred Tax' and have restated comparative figures accordingly.

UITF28 requires us to treat lease incentives (such as rent-free periods or
contributions for fitting out) as revenue costs. These are deducted from the
contracted rent and the resulting net income is then spread evenly over the
lease term (or the period to first rent review if shorter). Our previous
policy had been to recognise rent from the conclusion of any rent-free period
and to capitalise the cost of other incentives. The impact of this change is
to increase gross property income in the current period and prior year by £
1.9m and £3.2m respectively.

FRS19 requires that deferred tax should now be provided for in full on all
timing differences that are not permanent. The FRS does not require (or indeed
permit) deferred tax to be recognised on our revaluation surplus. Our
accounting policy had been to recognise deferred tax only to the extent that
liabilities or assets were expected to crystallise. We have therefore changed
our policy to make full provision for timing differences which, in our case,
arise primarily from capital allowances. Following the sale or demolition of a
property, any deferred tax provision that is not crystallised will be released
to the profit and loss account. The effect of FRS19 is to increase the tax
charge for the current period and prior year by £0.6m and £4.8m respectively.
Our provision for deferred taxation at 31 March 2001 has been restated and
increased by £122.4 m. FRS19 has no impact on the actual taxes that we pay.

During the last 2 1/2 years we have sold some 200 properties and in no
instance did we suffer a balancing charge for plant and machinery allowances.
The deferred tax provisions that we would have set up under FRS19 would
therefore have all been written back on the disposal of these properties. Our
experience is that FRS19 liabilities on our investment portfolio are unlikely
to crystallise in practice and we have therefore excluded them when
calculating adjusted earnings and adjusted net assets per share.

Property investment

Rental income increased from £244.3m to £262.0m. This has been achieved
despite a further rationalisation of the portfolio. Adjusting for the effects
of acquisitions and sales, rental income on properties owned throughout the
period under review increased by £25.2m.  The main contributors to this
increase were £13.2m from reviews and renewals, and £6.8m from letting
developments. The cost of bad and doubtful debts for the current period was
0.24% of rent, a decrease on the prior period.

The net effect of property sales and acquisitions either unconditionally
exchanged or completed in the first six months will reduce rental income in
the second half of the year by £3.3m. However, we anticipate that the major
exercise to reposition our portfolio will be substantially complete by next
spring. Property management and administration expenses rose by £18.1m to £
35.5m. Of the increase, £12.8m, including amortisation of goodwill is
attributable to the inclusion of Trillium with the remainder being incurred to
build the Group's portfolio management and development infrastructure to
support its new strategy.

Total Property Services

LS Trillium earned a unitary charge of £147.3m from the delivery of services
to the DSS in the six months to 30 September 2001, generating profits before
interest, goodwill amortisation and tax of £20.6m. Since the period end, LS
Trillium has concluded a 30 year contract with the BBC and its joint venture
company, Telereal is in advanced discussions with BT.

Cash Flow and Balance Sheet

The six months to 30 September 2001 showed a net cash outflow, before capital
expenditure, dividends and financing, of £10.6m, compared with an inflow of £
118.3m for the comparable six month period.  This occurred because a March
2001 interest payment date and the September 2001 rent quarter date fell on
weekends, causing additional interest to be paid and less rent to be received
in cash terms during the six months under review.  During the period,
expenditure on acquisitions and development properties was £272.3m and
proceeds from sales were £243.4m, so there was a net cash outflow of £172.0m
from the Group's business activities.

At 30 September 2001, the value of the Group's investment properties was £
7,904.1m, of which just under £1 bn related to properties in our development
programme. The total value of property investments fell by 0.02% over the last
six months, which, on a like for like basis (after adjusting for the impact of
purchases expenditure and sales) equates to an underlying decline in value of
0.5%.


Looking forward our low gearing provides some protection against possible
declines in asset values while our financial strength gives us the flexibility
to take advantage of any opportunities which may arise.



14 November 2001

A copy of the Interim Results will be sent to shareholders and copies will
also be made available to the public on request to the Secretary at the
registered office, 5 Strand, London WC2N 5AF.

This report and the Report and Financial Statements for the year ended 31
March 2001 are available on the Company's website at www.landsecurities.com


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