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Land Securities has announced plans to split the business into three seperately quoted companies after revealing a slump in pre-tax profits.

The company said it plans to demerge property outsourcing business Trillium and split the remainder of the business into two divisions focusing on retail property and the London property market.

It said the three-way break-up would increase shareholder value and attract investment from global real estate funds, which favour specialist companies.

At the same time, the company release its interim results statement for the six months ended 30 September. It said it had a pretax profit of £375.2m compared with £1.17bn in 2006, which is said was a result of smaller valuation surplus.

The adjusted diluted net asset value was up 55p to 2236p, and increase of 2.5%, and the basic net asset value was at 2356p up 52p.

Trillium has been outperforming the rest of the group, with a return on capital since acquisition of 28% a year. The company said it has different valuation metrics to a traditional property company because it focuses on outsourcing in private finance initiatives.

Land Securities chief executive Francis Salway said: "We have three strong businesses, all performing extremely well. However, our board is committed to remaining at the forefront of an evolving property sector and recognised the need to test our current business structure."

The company has also announced a joint venture with Sainsbury through its retail portfolio.

Initially the 50:50 joint venture, The Harvest Partnership will run for seven years and own the freeholds of three properties to a market value of £113.4m.

Land Securities will contribute a Sainsbury supermarket in its ownership in Hull with Sainsbury’s contributing freehold stores in Thanet and Wandsworth. The stores will be let to Sainsbury’s on new 25 year leases.

In a separate transaction, Sainsbury’s has exchanged contracts to purchase two existing stores from Land Securities in Winchester and Wednesfield.