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Zurich-based retail and property group Jelmoli Holding is to spin off its real estate activities into a separate listed company. Shareholders backed the board's proposal to create two focused listed entities, one for investment and one for real estate, during an extraordinary general meeting last week.

As it stands now Jelmoli Holdings' retail segment covers a range of shopping concepts, including Jelmoli Zurich department store and shopping galleries; sportswear chain Beach Mountain and Fashion Bazaars. The real estate operations owns a portfolio of shopping centres and shopping galleries.

The real estate company will continue to be known as Jelmoli. Trading in both companies is expected to start in March 2009. The new Jelmoli will be the second largest public real estate company in Switzerland with a property market value of approximately CHF 3.2 bn and a book equity value of CHF 1.6 bn. It will also be the only major property firm in Switzerland that derives the majority of its rental income from retail clients. The investment company will be named Athris and will hold cash and financial receivables, the group's Seiler Hotels, and 'less conservative' real estate participations in Russia and Algeria as well as the other retail trade businesses.

In a statement, the board said Jelmoli will be uniquely positioned through its exclusive focus on the Swiss market, its real estate portfolio focused on Zurich and Geneva, low vacancy rates and long maturity of rental contracts. CEO Christopher Chambers said the shareholder backing for the strategic plan drawn up by management marked an important day in the group's history. 'Much has been achieved in recent months to create a strong platform for the future success of both Jelmoli and Athris against a backdrop of the most difficult market conditions experienced in a generation,' he said.