Land Securities confirms it is in talks over possible rights issue

LandSec, which runs some of the UK's biggest shopping centres, including the Buchanan Galleries in Glasgow and Livingston's Almondvale centre, said it had held talks over the "merits" of a rights issue in response to mounting speculation it was next in line to make an investor cash-call.

British Land announced plans last Thursday for a 740 million rights issue just days after rival group Hammerson launched its bid to raise 584m from shareholders.

Weekend press reports suggested LandSec was in the final stages of approving a deeply discounted rights issue to raise between 500m and 700m to repair its battered balance sheet.

The group said yesterday that the outcome of its recent discussions on the move would be "communicated to shareholders through the proper channels at the proper time".

LandSec has been hit hard by the financial crisis, last November revealing it slumped into the red by 1.74 billion at the half-year stage from pre-tax profits of 365.2m a year earlier.

It also announced it was abandoning radical demerger plans that would have seen the business split three-ways, into London property, UK retail and outsourcing through its Trillium division.

Property firms are asking investors to stump up cash to help shore up their finances after taking hefty writedowns on the value of their property portfolios.

But they also want the cash to be able to make opportunistic acquisitions as they appear in a weak market.

LandSec co-owns the Cabot Circus shopping centre in Bristol with Hammerson and has an interest in the Bullring in Birmingham as part of an ownership alliance.