Land Securities confirms review of 'business structure'

Land Securities confirmed on Wednesday that it is conducting a 'review of its business structure' but stopped short of commenting directly on a newspaper report that suggested one of the options is a break-up of the largest property company in the UK. 'The review is well progressed and the company will provide a further update once the review has been completed and any decisions, as appropriate, have been made,' Land Securities said in a short statement.

The company's shares rose strongly on Wednesday morning after the Daily Telegraph newspaper reported that the property major is considering a break-up. The drastic move is reportedly one of several options being studied as part of a wider strategic review ordered by chairman Paul Myners because of the poor performance of the share price this year.

The company's shares were up 31 pence to £18.58 in early trading on Wednesday. But this is still a long way from the £23.23 price at the start of 2007 when UK property companies received a boost from the creation of the tax-friendly real estate investment trust (REIT) structure. Like its fellow REITs in Britain, Land Securities has seen a steep decline in its share value since then, and it is now trading at a 25% discount to its net asset value. CEO Francis Salway - who is leading the strategic review - commented in the Wednesday's statement: 'It became evident to us in the run up to and following REIT conversion that we should test our current business structure against alternative options to ensure that we have the optimal structure for creating long term shareholder value.'