LONDON, May 1 (Reuters) - Land Securities, Britain's biggest property firm, is bankrolling the launch of a venture capital company to back burgeoning retailers who agree to rent space in their malls, a company spokesman told Reuters on Friday.
Land Securities, which owns around 5.5 billion pounds worth of shopping malls and retail assets across Britain, is looking to invest a maximum of 5 million pounds to cover the start-up costs of the company, which will operate independently of the real estate investment trust, the spokesman said.
The un-named new company will be manned by a team of around five people recruited by Land Securities and will encourage international brands, internet businesses and start-up retailers to open or trial their first stores in the UK.
"It is very early days in the development and there are no immediate plans for major announcements on who might be interested, or when or how it might be taken forward," the spokesman said.
If successful, the venture capital company would take an agreed portion of profits from the retailer, while Land Securities would benefit from lower vacancy rates, additional rental income and higher footfall across its retail portfolio, the spokesman said.
News of the plan could boost morale in Britain's stricken retail sector, where the recession-led troubles of chains such as Woolworths, Zavvi and Viyella have led to a sharp rise in the number of empty UK shops.
It also follows months of talks between several of the UK's biggest property landlords and their ailing retail occupiers, who have called for sweeping reforms in the way rents are paid to help them weather some of the worst economic conditions in decades.
Traditionally, retailers have been obliged to pay rents on a quarterly basis in advance, but some tenants have complained the convention puts an unnecessary burden on their cash flows. (Reporting by Sinead Cruise; Editing by Jon Loades-Carter) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters)