Rugby Estates Investment Trust has bought its second private property company, as it looks to build up its portfolio before converting to a REIT.

The AIM-listed company revealed this morning that it has bought JRPA Properties for £20m, £13.8m in cash, £3.4m in guaranteed loan notes and 450,000 shares in the trust.

JRPA has a portfolio of seven properties in southern England, valued at £18.3m in March. Company accounts show that if the properties were sold they would incur a tax liability of £1.6m.

Rugby’s strategy is to buy up company’s with large capital gains tax liabilities, before converting to a REIT, thus extinguishing this liability.