LAND SECURITIES will bring the curtain down on 63 years of history this week, when the FTSE 100 property giant announces radical plans for a three-way break-up.

The group, whose founder the late Lord Samuel coined the phrase “location, location, location”, is expected to announce the proposals when it unveils its half-year financial results on Wednesday.

A wholesale break-up would see the company, which started life in 1944, separated into three constituent parts – Trillium, its outsourcing division; retail; and London offices. It is anticipated that such a complex separation will take up to a year to execute and will only be carried out once market conditions improve.

It is understood that Francis Salway, the group chief executive, will take charge of the retail division; the other two divisions will be run by their existing heads – Mike Hussey for London offices and Ian Ellis for Trillium. Richard Akers, the existing head of the retail portfolio, is expected to stay with the division and take on a senior asset-management role.

It is unclear whether Martin Greenslade, the group finance director, will choose to remain with the business in the long term once it is broken into separate entities.

The break-up plans come just two months after Land Securities announced in September that it was conducting a review of its business strategy under the leadership of Salway and Paul Myn-ers, its chairman.

It is understood the group has decided to press ahead with a break-up in response to the trend among investors for real estate investment trusts (Reits) to specialise their activities.

One City source said: “Demerging Trillium was a no-brainer because its value was not being recognised by the stock market, but the board probably concluded that if you were starting with a blank piece of paper there is no reason why London offices and shopping centres made a natural fit either.”

It is expected that all three divisions will eventually be demerged as separate, tax-efficient real estate investment trusts on the London Stock Exchange.

Analysts believe the London office division would be capitalised at around £2.8 billion and retail would be worth about £2.7 billion. As a separate entity, Trillium could have a market cap-italisation of £750m-£1 billion.

Depending upon the capital structure adopted by the company, and how much debt is added in, it is expected to have an enterprise value of between £1.5 billion to £2 billion.

It is thought no firm decisions have been taken about what the individual companies will be called, but it is likely Trillium will drop any connection with the Land Securities name.

News of the break-up is likely to come as a shock to many in the property industry who had anticipated that only Trillium would be demerged.

Critics of a wholesale break-up fear the performance of the London office portfolio would be too volatile as an independent entity. But proponents argue the converse, insisting its outperform-ance is often masked by a pedestrian performance from the retail division and vice-versa.

The news comes at a difficult time for the listed-property sector. Falling asset values and the credit crunch have combined to wipe billions from the share prices of the biggest listed stocks since the start of the year. Overseas predators, including US Reits and sovereign funds, are rumoured to be running the slide rule over many of the largest companies. Hammerson is regarded as the most likely target – its shares have plunged by 40% since peaking at over £17 earlier this year and there are question marks over its future.

Vornado Realty, the US Reit, is understood to be among the potential predators.

Meanwhile, British Land, also tipped as a bid target, is expected to sound a health warning on the outlook for the sector as it reveals this week that its flagship regional shopping centre in Sheffield has fallen in value by about £100m to £1.6 billion.

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