Land Securities ‘considers break up’

Source: Stock Market Digital

Date :05/09/2007 09:16:07

Paul Myners, chairman of Britain's biggest listed property firm Land Securities, has ordered the group to examine a possible break-up, the Daily Telegraph has reported.

The move is one of the options being looked at as part of a wider strategic review in response to poor share price performance, the paper said.

A break-up is likely to involve the demerger of the firm's property outsourcing business Trillium, it said.

The firm’s chief executive Francis Salway told Reuters in June that he would not rule out spinning off some of its units, including Trillium, whose contribution to group earnings was likely to grow to 20-30 percent from around 16 percent now.

But he said then that the company would stick to a diversified business model, with its emphasis on both office and retail property, despite a view among some fund managers that REIT shareholders were better served by firms that specialised by property type.

Property shares have sagged this year after a stellar performance for the past couple of years, as rising borrowing costs bite and the real estate market loses steam after years of what industry executives call super-normal growth.

Land Securities shares have fallen around 20 percent so far this year.

September 5 2007