Developer seeks to strengthen balance sheet after revaluations slash 20% off portfolio's worth

Land Securities has announced that it is seeking to raise £755m through a rights issue of 291 million ordinary shares at a discounted 270p each.

The property firm said it needed to strengthen its balance sheet after its combined investment property portfolio plummeted in value from £12.5bn September last year to £9.97bn by the end of January this year. After adjustments, the decline was 20.1%

Land Secs' Victoria interchange
Land Securities' planned Victoria interchange scheme in central London

Francis Salway, group chief executive of the UK-based company, said: “We have a good track record of creating value for shareholders through the property cycle and have decided to seek further capital at this stage to ensure that the company's balance sheet is appropriately structured.

“At a time of raising fresh capital, the board has determined that it would be prudent to reset its current dividend to a level that we believe is sustainable and provides the potential for future growth.”

The firm will offer eight shares for five at yesterday's closing price of 270p. Citi, JP Morgan Cazenove and UBS Investment Bank will underwrite the deal.

Competitors British Land and Hammerson have issued deep-discount rights issues in recent days, while Brixton and Segro are pondering whether to follow suit.