PropertyEU - January 9, 2009
London-based property investment and services firm Telereal has agreed to acquire Land Securities' outsourcing business Trillium for £750 mln (about EUR 831 mln).
The investment volume is considerably lower than the £1 bn-plus valuations of Trillium in 2007-2008. But the deal does not include Trillium's Accor hotel portfolio which will remain within Land Securities.
In a statement, Land Securities said the headline enterprise value of £750 mln was based on Trillium's balance sheet - excluding the Accor hotels - at end-March 2008. The gross assets of Trillium (excluding Accor) were £1.57 bn end-March 2008 and £1.3 bn at end-September 2008. The sale of Trillium is expected to complete on 12 January.
Land Securities, the largest real estate investment trust in the UK, unveiled plans back in November 2007 to demerge into two separate listed companies for retail property and the London office portfolio. The group planned either to sell Trillium, or failing that list it as a separate entity. However, the worsening of the global financial crisis stymied the re-organisation, with the sales process for Trillium taking much longer than expected. Land Securities suspended the demerger plans for its retail and office divisions in November last year.
The UK REIT said on Thursday that the sale of Trillium will generate cash proceeds of £444 mln which will be used to reduce the group's net debt.
Francis Salway, CEO of Land Securities, said: 'We are pleased to have concluded this sale in a challenging economic environment. We will now focus on our core property investment and development activities. The cash proceeds will strengthen our balance she"
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