Picton in merger talks with Invista trust

Picton Property has made a non-binding offer to merge with the £371 mln (EUR 427 mln) Invista Foundation Property Trust.

'The enlarged group is expected to provide a significant enhancement in liquidity; greater economies of scale and increased attraction to a wider investor base,' Picton said in a statement on Friday. Discussions are continuing between the parties and good progress is being made, it added.

Additionally, the Invista trust has announced it has entered into an agreement with Schroder Property Investment Management (Schroders) for the management of its portfolio, with effect from early October. The appointment follows the announcement by the Invista trust in March that it had terminated its investment management agreement with Invista Real Estate Investment Management.

Retaining Schroders as asset manager is however conditional on a merger with Picton not going ahead. In case however the merger with Picton is successful, the enlarged company is likely to be managed internally.

Under the agreement with Schroders, the Invista trust will pay Schroders a management fee of 1.1% per annum.

Picton, a closed-ended investment company listed on the London and Channel Islands stock exchanges, was established in 2005 to invest both directly and indirectly in commercial property across the UK. With a property portfolio of £426 mln, Picton will be managed by Picton Capital from January 2012 following the termination of a management contract with ING Real Estate Investment Management.

Last year Picton successfully acquired and integrated Rugby Estates Investment Trust, which comprised some 33 assets. Picton Property Income changed its name from ING UK Real Estate Income Trust Limited on 1 June 2011.