British Land chief executive Stephen Hester has moved to snap up the company’s shares in what he describes as a market that has too ‘gloomy’ an assessment of the company’s prospects

The company announced a £250m share buy-back late yesterday, and as a result, its share price has moved up 1.3% during this morning’s trading, to 1383p a share.

Hester said of the decision: ‘We believe the gap that has recently opened between sector share prices and real asset values is too gloomy in its implied view of our prospects.’

Land Securities’ share price moved up 2.1% to 1768p a share on Wednesday amid speculation that shareholders would pass a resolution allowing a share buy-back at its annual general meeting on 17 July.

‘Our balance sheet remains efficient,’ said Hester. ‘And our property sales allow us capacity to profitably reinvest in our business both directly and via the share repurchases we are announcing today.

‘We intend to remain flexible in relation to the timing and amount of share buy-backs, taking account of our share price, property market conditions, balance sheet leverage and competing investment opportunities.’

After a torrid first half to the year, UK REITs are trading at an average discount to net asset value of 15%. The price reflects a perception in the market that property values are set to fall.

British Land had seen its value fall 22% since becoming a REIT on 1 January, while LandSecs has lost 25% of its value.

British Land began the buy-back with the purchase of one million shares at 1369.8p a share. It plans to purchase a further £250m of shares over the next 12 months.