Breaking up Land

14 November 2007 By Simon Nixon

The proposed breakup of the UK s largest property group goes further than expected. But specialisation is likely to be the way of the future for quoted real estate. Even so, it takes courage to make the first move in the face of a market downturn and with little prospect of any immediate boost to value.

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Land Securities announced on November 14 that it plans to demerge its UK retail and London office operations, and Trillium, its real estate outsourcing business. Chief Executive Francis Salway said the split will take place depending on the condition of equity debt markets, but would likely be in 2009.

The company's net profit fell 57% in the six months to end of September, mainly because of smaller gains from a revaluation of its £15bn of real estate investments. Adjusted diluted NAV grew 2.5%, beating forecasts.

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