Liberty International will divide its £6.1bn UK property portfolio into two separate companies in what will be the biggest demerger on record in the listed real estate sector.
The firm’s £4.4bn shopping centre business will be annexed into a real estate investment trust, which will seek a market capitalisation of £2bn, according to the Financial Times.
The other new business will take control of its London properties, which include conference centres that generate more than £30m a year and are worth in excess of £1.7bn. It is expected to be given an initial value of about £1bn.
The London property arm of the company is likely to recover from an initial loss of value as it is buoyed by a newly bullish commercial property sector in the UK.
Liberty, which owns property in Covent Garden and Earl’s Court, was founded by Sir Donald Gordon, whose family will retain a stake in both of the new companies.
The demerger process was overseen by Rothschild. UBS and Merrill Lynch are likely to advise on the deal that will see the company drop out of the FTSE 100. A Liberty spokesman was not available for comment last night.
Bitter rival Land Securities, the second biggest company in the sector behind British Land, also considered drawing a line down the middle of their operations but rejected the idea in 2008.
FAST FACTS | LIBERTY INTERNATIONAL
Liberty International owns around £6.1 bn worth of property in the UK.
It is the third biggest player in the commercial real estate sector behind British Land and Land Securities.