Land Securities takes cautious stance on UK property

(Adds details, analyst comment, share price)

LONDON, Nov 10 (Reuters) - Land Securities Group Plc , Britain's largest listed property developer, sounded a cautious note about the country's real estate market on Tuesday after reporting slower growth in the value of its 14.6 billion pound ($22.07 billion) property portfolio.

The developer behind London's "Walkie Talkie" skyscraper, attributed a 5.7 percent rise in its half-year adjusted net asset value per share (NAV) to a strong performance in its London leasing and retail businesses.

But the rise in NAV - which reflects the value of a property company's buildings - was less than the 14.5 percent rise in the previous six months and came in below analysts' expectations.

Shares (Berlin: DI6.BE - news) in the blue chip company were down 3.2 percent by 1240 GMT, compared with a 0.5 percent fall in the FTSE 100 index .

Land Securities (LSE: LAND.L - news) was one of the first companies to build speculatively after the property market downturn in 2008, but it said it had no plans to add to its speculative development programme, slated to be completed in July, because of rising land and construction costs.

The company also said it would reduce its leverage through further property sales. It (Other OTC: ITGL - news) sold 406.5 million pounds in assets in the six months from April (LSE: 0N69.L - news) .

Sue Munden, analyst at Panmure, said this has prompted some investors to wonder if the group had called the top of the market.

"Land Securities is making lots of cautious noises about the stage of the cycle," Jefferies analyst Mike Prew said. "It's not planning any more London developments and it's very much battening down the hatches thinking that the cycle is mature."

Its cautious approach contrasts with the strategy of its closest rival British Land Plc, which said in May it expected to spend 378 million pounds on development over the next three years.

Land Securities' ungeared total property return also underperformed the industry average, rising 5.9 percent compared with a 6.8 percent rise in the IPD Quarterly Universe benchmark.

In a separate statement, the company said it had agreed to let space in its Zig Zag office building in London's Victoria business district to Deutsche Bank (Other OTC: DBAGF - news) on a 15-year lease.

Prime central London office rents have risen 10 percent this year to a record 66.50 pounds per square foot, exceeding pre-crisis highs, and are expected to continue to grow next year, according to a report by property consultants Cushman & Wakefield.

($1 = 0.6615 pounds) (Reporting by Lisa Barrington, editing by Sinead Cruise and Jane Merriman)