LandSecs will take a year to split itself into three

However, chief executive Francis Salway denied the long waiting time was due to the present rocky state of the commercial property market.

He said: "This is not about trying to time this demerger for a particular point in the property cycle when the businesses will be spiking in value. It is about getting the preparatory work done properly."

Citing the GUS demerger, Salway said such massive corporate reorganisations have to be done properly, with a huge amount of financial and corporate preparation.

After a review conducted under the guidance of chairman Paul Myners, LandSecs will split into a London property business, a retail property business and Trillium, its property management arm.

The idea is that investors will be able to get access to a far more focused property business. Bonanzas such as the £575 million development profit LandSecs has made in little over two years from its Cardinal Place development in London's Victoria and New Street Square site in Holborn, will be far more visible in a smaller, more focused London company than across Land Securities' current, vast £15 billion property portfolio.

Analysts have pointed out that this will also make each of the three divisions more volatile.

The London and retail businesses will each be worth £3 billion and Trillium will be worth £1.5 billion at current valuations. Salway caused ructions in the property world in May when he warned of a slowdown in the commercial market, particularly in the less-premium sites where some of its rivals are exposed.

His forecasts proved prescient, given the impact of the autumn credit crunch, particularly in the City. Today he said: "The outlook for the London office market conditions in the West End continues to be positive with very low vacancy rates.

"For the City of London, although we have seen strong increases in rental values in the last six months, we are alive to commentary about weaker employment growth in the City which has some bearing on rental growth in the short term."

That could be translated as: the West End is fine - the City will suffer badly if the big banks introduce major redundancy programmes.

In the past six months, Land-Secs' London business has staved off declines in value because of an 11.4% increase in rental levels.

That has meant its overall divisional increases were up by 4.2% in the half-year.

Overall, the portfolio's value increased by 0.9% - equivalent to £130.8 million - from March to September, at the top end of expectations.

Salway followed through on his wary prognosis in May by selling properties.

A total of £900 million went under the hammer over the period, including the White-friars shopping centre in Canterbury and a development in Southwark.

He staved off some of the gloom about the London market today, however, pointing out that Land-Secs has 1.6 million square feet of new office and retail space coming to completion this financial year, 93% of which is let.