Land Securities is to sell its Trillium outsourcing arm to Telereal for £750m.

The landmark sale, revealed by Property Week (10.10.08), will be concluded by 12 January and will not include the Accor hotel portfolio which will remain with LandSecs.

Trillium chief executive Ian Ellis will step down from the LandSecs board on completion of the deal.

The transaction, which analysts had hoped would be around £1bn, will generate a loss of around £340m.

However, it will give Land Securities £444m of cash to reduce its debt, with an additional £25m in cash to be deferred by up to two years.

As part of the transaction, Land Securities will loan £50m (on market terms) to the Trillium Investment Partners Fund.

Chief executive chief executive Francis Salway said: ‘We are pleased to have concluded this sale in a challenging economic environment. We will now focus on our core property investment and development activities.

‘We continue to run the group with a cautious outlook and a focus on balance sheet management.’

Graham Edwards, CEO of Telereal, said: ‘Bringing together Telereal and Trillium will benefit our customers, our staff and our shareholders. Trillium and Telereal are a great fit – we are two of the leading players in the real estate sector whose businesses are highly complementary.’

JP Morgan analyst Harm Meijer said: ‘We like the disposal as it increases the company’s investment focus and lowers to loan-to-value ratio, but we had hoped for a better price.’