Land Securities in £165m Trillium buy

Click to follow
The Independent Online

Land Securities, the FTSE 100 property group which has been regarded as a lumbering giant, yesterday pulled off the potentially transforming acquisition of Trillium, the company that pioneered the services model for property. The deal is worth £165m, of which £160m is being paid in cash.

Land Securities, the FTSE 100 property group which has been regarded as a lumbering giant, yesterday pulled off the potentially transforming acquisition of Trillium, the company that pioneered the services model for property. The deal is worth £165m, of which £160m is being paid in cash.

Ian Henderson, Land Securities' chief executive, said: "This adds a third leg to our business, adding property services to asset management and development. The world is changing. We need to be much more focused on our customers now."

Trillium, which is backed by Goldman Sachs, the investment bank, has been at the forefront of property deals within the Government's Private Finance Initiative and the developing corporate market, whereby companies outsource all their property needs.

This has turned the tradition model for a property company on its head. Trillium owns no property; it takes on portfolios on leases of about 20 years and rents them back to occupiers. The innovation is that it does so on very flexible terms and provides all occupancy services to tenants, such as maintenance. While property companies employ a handful of people, Trillium has 650 staff.

Trillium, led by Manish Chande, holds the Prime contract covering the 600-building property portfolio of the Department of Social Services.

Adrian Elwood, an analyst at Teather & Greenwood, said: "This is transforming for Land Securities, which has been struggling to keep up with trends in the industry. It puts them potentially at the cutting-edge of one of the main future developments in the sector. It's a brilliant strategic move."

Mr Chande, who together with co-founder Martin Myers owns 18 per cent of Trillium, will join the Land Securities board. Land Securities shares closed up 7 per cent at 766p.

Before yesterday's deal, Trillium and Land Securities had submitted joint bids for the property outsourcing contracts from the BBC and London Underground, for which they have been short-listed.

Mr Chande said: "Land Securities has put its head above the parapet and pulled itself away from the pack of traditional property companies. That's to their credit."

Comments