Land Securities put out a strong set of annual results this morning and signalled that the cycle was approaching its peak.

Chief executive Rob Noel said that whilst it would press ahead with the development of its committed schemes that it recognised that “the risk profile of future speculative development is changing as competition for sites has increased, construction costs are rising, and development activity is set to pick up” and that “as a result, any new development commitments in the near team are likely to require pre-lettings”.

It said that it was already preparing the business to take advantage of opportunities as and when the next downturn came about, putting in place “low gearing levels so that risk is reduced and we have good capacity to buy as market conditions turn and opportunities present themselves”.

It did however state that it did “not expect to see a correction of the balance between supply and demand in the London office market over the next two years” as “there is not enough efficient, technically resilient space for businesses and this bodes well for our committed speculative developments”.

More broadly the company reported an 11.5% rise in its basic net asset value per share and a 9.9% rise in revenue profit to £319.6m.