Property giant’s £775m cash call

PROPERTY giant Land Securities today announced a rights issue to raise £755.7m.

The issue by the company which owns Liverpool’s St John’s and Clayton Square shopping centres, as well as Aintree Racecourse and Chester retail parks,
will see shareholders receive five shares for every eight they own in Land Securities at 270p per share.

The move, which will see almost 291 million shares issued, follows recent cash calls by rivals British Land and Hammerson.

The announcement by the UK’s biggest listed property company comes as the sector struggles to cope with increasing debts and a downturn in commercial property sector.

Land Securities said the rights issue would strengthen its balance sheet, help protect against the economic downturn, and provide it with scope to react quickly to pricing and timing opportunities. 

Chief executive Francis Salway said: “We have a good track record of creating value for shareholders through the property cycle and have decided to seek further capital at this stage to ensure that the company’s balance sheet is appropriately structured.

“This will help protect the business against the downside risk of further falls in property values and thereafter position the business to exploit attractive market opportunities.

“At a time of raising fresh capital, the board has determined that it would be prudent to reset its current dividend to a level that we believe is sustainable and provides the potential for future growth.”

The rights Issue is subject to approval by shareholders at a general meeting to be held on March 9.