Trocadero to get listing in Burford demerger

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The Independent Online

Deputy City Editor

The chequered history of one of London's busiest tourist destinations took another twist yesterday as the Trocadero confirmed it is to gain a stockmarket listing later this year. Shares in Burford Holdings, the property company that currently owns the site at Piccadilly Circus, jumped 7.5p to 127.5p after it announced the planned demerger.

Burford only acquired the Trocadero last September, picking the leisure and shopping centre up from receivers KPMG for pounds 94m, a snip compared to its estimated pounds 250m value at the top of the property boom, when it was owned by the leisure company Brent Walker and Power Corporation, the Irish property investor.

One of the most respected and entrepreneurial property companies, Burford surprised no one when it transformed the potential value of the tawdry, under-exploited site soon after the acquisition by teaming up with Japanese entertainment giant Sega to launch Europe's biggest indoor space-age theme park, SegaWorld.

The deal has transformed 120,000 sq ft of unlettable office space into what is expected by next summer to become a paradise for lovers of Star Trek, virtual reality games and stomach-churning rides. Although the Trocadero attracts more than 16 million visitors a year, until now few have actually spent anything there, giving the site enormous unrealised potential.

The first SegaWorld, in Yokohama on the outskirts of Tokyo, has been a huge success, despite occupying a much less favourable location than the Trocadero.

Burford plans to demerge the Trocadero by offering its shareholders a share in the leisure site for every Burford unit they already own. The new Troc shares will be listed on Aim, the new market for start-up and young companies, until it has the requisite trading record to allow it to move to the main market.

The demerger is the latest move by a company that has left its peers standing throughout the recession and since. From 1990, soon after it bailed out of property at the top of the market, its shares have quadrupled. This year, when most of the sector has been struggling, Burford's shares have jumped 38 per cent.

Part of the rationale behind the demerger is to capitalise on the high rating that Burford believes the Trocadero should attract.

According to Nigel Wray, Burford's chairman, companies with both the earnings streams that leisure businesses provide and the asset backing characteristic of property companies tend to be undervalued by the stockmarket.