Local Shopping REIT begins trading
The Local Shopping REIT Plc today joined the London Stock Exchange’s main market, becoming the first new UK start-up REIT.
The company, which buys shops in parades, raised £160m through a placing and offer of new shares, which it proposes to use to grow its portfolio of 484 properties.
It was set up in January 2005 by Mike Riley and Nick Gregory, who were running Castlemore Securities’ London office. It has accumulated a £208m portfolio spread across 475 assets, of which 1,465 units produce a net rental income of £13.6m a year. It has a further £16m of properties under offer at an average yield of 7.25%.
‘The Local Shopping REIT is an excellent example of how the creation of a tax-efficient, property investment vehicle has helped to open up new opportunities for investors,’ said Martin Graham, director of markets at the London Stock Exchange. ‘The highly specialised nature of its investment strategy would be difficult enough for an in-house property investment team to replicate, but until this year, a listed investment vehicle would have carried a double taxation burden.’