Central London was the star that helped Land Securities outperform market expectations in 2011, but retail and the company’s assets in this sector continued to lag.

The UK’s largest REIT revealed a 4.5% rise in net asset value to 863p a share in results for the year to March, in spite of the wider economic gloom. This was ahead of stock market expectations of 856p a share.

The prise was driven by a 1.2% increase in rents – yields on most of its investment assets remained stable, the company said – as well as an increase in the value of its development assets by 8%.

Revenue profit – the profit from the company’s activities rather than surpluses from upward valuations – increased 9% to £299m.

In terms of values, the company’s portfolio overall increased 2% to £10.3bn. Of the major sectors in which it operates, London was the strongest performer, with its Central London offices rising 4.3% to £3.5bn, and its Central London retail portfolio rising by 4.3% to £775m.

But the shopping centre portfolio fell in value by 3.2% to £2bn, with rents dropping on average 1.8% due to an increase in tenants in administration. Retail warehouses rose 1.1%.

In his maiden results as chief executive Robert Noel said that London would continue to perform well, and highlighted the growing polarisation of the retail market.

“Despite the current lull in financial services, London remains the stand-out vibrant global centre that constantly reinvents itself,” he said. “Sectors such as high-end fashion, business services, insurance and technology are particularly active. New businesses from overseas continue to arrive. Corporates require efficient, contemporary buildings that reflect their values and handle the demands brought by higher occupational densities than ever before. Much of the existing stock will not meet their requirements or their expectations. We are well placed to respond.

“The retail sector is undergoing a period of unprecedented change. Certain retailers, locations and assets have the potential to thrive. Others continue to lose ground. Changing consumer needs, tastes and behaviours are determining the winners and losers.

“Dominant centres in the right locations remain popular and a good mix of retail and leisure continues to attract visitors. In contrast, many locations have empty space which may never be re-occupied by retailers. Internet sales are winning market share.

“While this is hitting some retailers hard, we saw opportunities in the year to help others integrate the online world into physical stores. We also developed smart initiatives with online businesses such as Amazon and Ocado.”