Rugby Estates switches focus to asset management

UK listed property firm Rugby Estates said on Thursday it is to cut jobs and focus on asset management at the expense of development and direct property ownership. The moves are elements of a strategic review carried out in response to the 'continuing deterioration of market conditions in the property sector and the wider economy in general.'

The company will reduce the number of employees below its main board level to 10 from 16, bringing the total number of staff, including executive directors, to 13.

'The ongoing challenging market conditions have led the company's board to review Rugby's strategy and direction,' Rugby Estates said in a statement. It added that it would focus on asset management to boost shareholders value while reducing the capital employed in direct property holdings. As a result, Neal Taylor and Alex Wildman, who were responsible for Rugby Capital, the group's direct property trading and development arm, will step down from the board and leave the company on 31 December 2008.

In light of the strategic review, the company also intends to make a return of cash to shareholders of approximately 50p per ordinary share within the next few months.

David Tye, Executive Chairman of Rugby Estates, said: 'Rugby has always been focused on delivering value to its shareholders. Having carefully reviewed our strategic options in light of extremely challenging market conditions we have decided to take advantage of our efficient management structure and financial strength to re-shape the business. An important part of this process is to return cash to shareholders in the near future.'

This week, Multi Development told PropertyEU it intends to cut about 90 staff, about 12% of its 780-strong workforce, in preparation for the challenging market conditions expected in 2009. Several other Dutch real estate developers including TCN, OVG and AM have also reduced their staff levels. Dutch property giant ING Real Estate Investment Management is reportedly set to make about 20% of its staff in the UK redundant to save costs.