CLS Holdings has reduced its UK exposure by £110m as it pushes ahead with restructure.

In its interim management statement today it said £47.4m of sales in the UK have been completed since the end of January at an average yield of 7%.

It is in the process of restructuring to: ‘align the group's structure to reflect its pan-European operational focus and to enable the group to compete more effectively with other UK property investors enjoying REIT status.’

It said this process is ‘ongoing’.

For the period from January to 14 May 2008 it said ‘underlying profit for the first quarter has been strong with increased net rental income and tightly controlled costs.’

It said its debt levels had fallen to approximately £712m, from £798m in December and its cash has increased to approximately £134m, from £122m.

In the UK it said occupational demand has remained stable and vacancy levels have fallen from 5.8% in December to 3.55% through a combination of asset management, new lettings and property sales.

Executive Chairman of CLS, Sten Mortstedt, said: ‘Although we consider that property values will continue to soften in the near term, we take a long term view and believe that our current strategy will yield benefits in the future.’

In Europe it said its French portfolio was performing well and in Germany it is in negotiations to sell a number of properties.

It is also continuing development in Germany at its Bochum and Landshut projects.