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UK’s Local Shopping Reit eyes takeovers

It intends to use its tax-efficient status to boost portfolio

(LONDON) The Local Shopping Reit, Britain’s first specialist start-up real estate investment trust (Reit), says it is hunting for corporate acquisition opportunities to boost its retail property portfolio.

In a trading update yesterday, the company – which buys neighbourhood and convenience retail properties in urban areas – said it would continue to use its tax-efficient Reit status to help secure corporate acquisitions that increased the size and value of its portfolio most efficiently.

Since its admission to the London Stock Exchange on May 2, the company has bought 150 properties in 106 separate transactions for £47.8 million (S$143.2 million), bringing the total size of its portfolio to 633 assets.

This includes the £14.6 million of properties acquired when Local bought the entire share capital of privately owned Gilfin Property Holdings in August.

‘Our Reit status means we are well-placed to offer competitive prices and tax- efficient solutions to private property owners with an unrealised capital gains position,’ joint chief executive Nick Gregory said.

The company said the instability of the market was likely to provide greater opportunities in the current financial year.

In the period since its flotation, Local Shopping Reit said it had let 29 vacant properties and carried out 65 rent reviews, which increased its rental income by £417,097.

‘For the past two-and- a-half years, we have been focused on building the size of the portfolio. Now that we have turned our attention to asset management, we are beginning to see the rewards through good levels of rental growth,’ Mr Gregory said.

The company said it had a long-term debt facility of £120 million from HSBC which could be used to finance acquisitions.

 

Source: Reuters (Business Times 11 Oct 07)

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