Liberty considers split of portfolio

Liberty International, Britain's biggest shopping mall owner, is looking at splitting its portfolio into two separate listed companies as it battles to bounce back from the worst property crash in decades.
By The Newsroom
Published 5th Feb 2010, 23:26 BST
Updated 5th Feb 2010, 23:26 BST

The owner of London's Covent Garden said yesterday it was evaluating a split of its 6.1bn portfolio into a shopping centre business and a London properties business.

"Such a transaction requires a number of third-party approvals which have been requested and some of which are currently outstanding," Liberty said in a statement.

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"The board will only be in a position to decide whether to proceed or not once it has progressed these matters further," the company added, without giving details on the rationale or how the plan might be executed.

Despite owning some of Britain's most recession-proof property assets, Liberty's balance sheet is seen by some analysts as one of the weakest in the blue-chip property sector, where a new era of austerity has replaced years of cheap credit.

It is the only UK Real Estate Investment Trust (REIT) to have sold assets, mothballed developments and conducted multiple share sales to raise new funds and preserve existing capital.

It raised 280.5m in a placing in September, following an earlier 592m equity raising in April.

Nomura property analyst Mike Prew described the strategy as "sensible" because it would eliminate "a capital and management distraction" for Liberty's executive team.

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