Shares hit by property market fears
Land Securities is conducting a review of its business structure, prompting suggestions that a break up of the company is on the cards.
The review follows the group’s drop in share price over the past few months. Like many property companies, its shares have been affected because of fears of a possible slowdown in the commercial property market.
Land Securities chief executive Francis Salway said: “It became evident to us in the run up to and following REIT conversion that we should test our existing business structure against alternative options to ensure that we have the optimal structure for creating long-term shareholder value.”
Shares in some property companies rose last year when they converted to REITs (Real Estate Investment Trusts), but since then many have been falling.
The break could include the demerger of Land Securities’ property management business Trillium, which typically buys a portfolio of properties and leases them back to the former owner, charging fees for managing the property or refinancing. This allows companies to free up cash for other investments, while maintaining solid management.
Land Securities is the UK’s largest property company in the UK, with a£15.5 billion portfolio of property, including shopping centres and offices. It has a solid development pipeline including retail schemes Princesshay in Exeter, Willow Place in Corby, Christ’s Lane in Cambridge, Livingston town centre in Scotland, and St David’s 2 in Cardiff.