According to articles in The Daily Telegraph and the Financial Times, the largest UK Real Estate Investment Trust (REIT), Liberty International, aims to demerge. This means that the company?s London properties will be split into two.
One of the two new companies will be called Capital & Counties (CapCo), and its estate of 13 UK shopping centers will operate under the name Capital Shopping Centres (CSC). These shopping centres include the MetroCentre in Gateshead, as well as Covent Garden and the Lakeside shopping centre.
The article notes that this could indicate an increasing trend among large REITS. Commercial property owners such as Land Securities have for example also investigated the merits of demerging.
Patrick Burgess, the chairman for Liberty, said: ?The proposed demerger responds to what the Liberty International board considers to be a changing approach to investment in real estate, both in the equity markets and in the property market, requiring greater focus and more active management.?
Analysts, regulators and shareholders are said to welcome the move. Once the demerger is concluded, shareholders will receive one share of CapCo to match their number of shares in the current business.
As for Liberty, its shares recently fell by 4 per cent to 486p. Its portfolio value fell by 20.6 per cent, and it has displayed a consistent performance level below that of the industry average, a trend that spurred the demerger move.
The aims of CapCo are to develop Earls Court & Olympia in London. The new company will operate under the leadership of Ian Hawksworth, managing director of the division. Liberty?s finance director, Ian Durant, will become the chairman of CapCo.
