Castlemore is setting up a high street shop REIT

The Local Shopping REIT will be run by Castlemore directors Mike Riley and Nick Gregory as joint chief executives with Castlemore owner and founder, Grahame Whateley as non-executive chairman.

The other non-executive directors are Grainger director Andrew Cunningham and Big Yellow co-founder Nick Vetch.

The flotation will raise £160m and the company aims to become the market leader in the local shopping market in the UK targeting neighbourhood and specialist property in urban conurbations such as local shopping parades and neighbourhood venues for convenience or ‘top-up’ shopping.

It will target a gross dividend yield of 4.7% and plans to deliver capital growth both from ‘buying well in a large and fragmented market’ as well as delivering ‘surpluses from asset management initiatives.’

The company already has £205m of property spread across 475 assets, with 1,465 letting units producing an overall net rental income of £13.6m a year and has another £16m under offer at an average yield of just over 7%.