Acquisition

Land Securities Group Plc
22 December 2006





22 December 2006





Land Securities Group PLC ('Land Securities')



Land Securities Trillium secures leading position in the public private
partnership market through acquisition of Secondary Market Infrastructure Fund.



Land Securities Group PLC announces that its property partnership business, Land
Securities Trillium ('LST'), has exchanged contracts to acquire Secondary Market
Infrastructure Fund ('SMIF'), a specialist public private partnership ('PPP')
business, from its existing shareholders STAR Capital Partners ('STAR'), Halifax
Bank of Scotland ('HBoS') and AMP Capital Investors ('AMP').  The total
consideration payable for the equity is £527m in addition to which LST will also
assume SMIF's net debt on completion.  As at 30 September SMIF's net debt
amounted to £184m.  By completion net debt is expected to have risen to
approximately £400m as a result of continuing acquisitions.  It is expected that
SMIF will be earnings neutral in its first full year, with profits before tax
rising to around £40m by year five as a result of contract income, refinancing,
management fees, aggregation benefits and profits from the future sale of mature
projects to co-investors.



Commenting on the acquisition Francis Salway, Chief Executive of Land Securities
said, 'This is an exciting step forward for the Land Securities Trillium
business which has now established itself as a market leader in public private
partnerships as well as property outsourcing.  Adding SMIF to our Investors in
the Community venture gives us an interest in around 100 PPP projects and an
unrivalled capability to grow our presence in this expanding market.  It plays
to Land Securities Trillium's strengths of partnering with the public sector and
adding value through managing service delivery and driving innovation.'



Secondary Market Infrastructure Fund

SMIF was set up in 2001 and acquired by STAR in December 2003 with HBoS and AMP
subsequently providing further capital to fund growth.  SMIF is now the leading
player in the secondary public private partnership market with a portfolio of
equity holdings in 79 PPP projects totalling 2.34 million square metres of
accommodation.  SMIF has an estimated market share in excess of 30% of the deals
transacted in the secondary PPP market.  The accommodation portfolio (over 80%
by value of the business) comprises public service buildings including schools,
hospitals and prisons while the balance includes infrastructure assets such as
highway maintenance and a stake in a water company.



SMIF comprises 89 people, of which 16 form the management team with the balance
responsible for providing asset management on many of the contracts.  SMIF
currently offers asset management activities including the management of day to
day services, finance, insurance and life-cycle capital maintenance.  The
existing management team will have a stake in the business' future returns and
growth.



Future potential

Going forward it is anticipated that LST and the management team will seek to
recycle capital invested through the introduction of third party investors
alongside LST while retaining ongoing asset management responsibility.  SMIF
will continue to build on its excellent track record of acquiring PPP interests.



Land Securities Trillium Chief Executive, Ian Ellis added: 'A year ago we set
out a strategy to access the multi-billion pound government Public Private
Partnership market.  In January, we implemented the first step with our
investment in Investors in the Community, targeting the primary PPP market.  The
acquisition of SMIF secures our position in both the primary and secondary
markets where we expect to see increasing convergence.  In less than 12 months
we have accessed a portfolio of opportunities which would have taken many years
to assemble through organic growth.   We can now deploy our traditional
strengths in customer service, asset management and financing through long term
partnerships.'



Bill Doughty, Chief Executive of SMIF added, 'STAR, HBOS and AMP have been
committed investors during SMIF's development and growth over the last three
years.  Their support and advice has added significant value to the business and
contributed greatly to the positioning of SMIF at the frontier of the PPP
market.  Along with the rest of the SMIF management team, I am delighted at the
prospect of working with LST in the future and making a significant contribution
to its exciting and broader PPP strategy'.



It is expected that the transaction will be completed in the first quarter of
2007 following receipt of third party consents from certain public authorities.



                                     -Ends-



For further information please contact:

Francis Salway / Emma Denne
Land Securities
Tel:      [phone]
          [phone]

Stephanie Highett / Dido Laurimore
Financial Dynamics
Tel:      [phone]



For more information on Land Securities visit www.landsecurities.com


                      This information is provided by RNS
            The company news service from the London Stock Exchange