Pramerica launches jv with Local Shopping REIT

Pramerica Real Estate Investors and The Local Shopping REIT, a UK real estate investment trust focused on investments in local shopping assets, have set up a joint venture to invest in retail parades and precincts throughout the UK.

The JV is committing to up to £37 mln (EUR 43.8mln) of equity, which with gearing, will provide a total of about £100 mln to invest in the UK neighbourhood/ convenience retail sector. Pramerica is providing 80% of the equity (£30 mln), while LSR will provide the remaining 20% (£7.5 mln). LSR will act as manager and be responsible for sourcing the investments.

The anticipated duration of the JV is five years, with a two year commitment period. The JV will identify assets with significant potential for future rental growth and the opportunity to deliver added value through active asset management. The investment size per transaction will range from £1.25 mln to £7 mln. The venture has already agreed to purchase a property in Stanwell, Middlesex let to Sainsbury’s and local tenants for £1.6 mln.

Commenting on the tie-up, Nick Gregory, LSR’s Joint Chief Executive officer, said: 'This joint venture provides us with increased equity to invest in our core market of local retail, while sharing the expertise and backing of Pramerica, one of the largest real estate investment firms in the world. This is an important strategic milestone for LSR, and I look forward to working alongside the Pramerica team to unlock the full potential of this market through our excellent operational expertise and infrastructure.'

Charles Crowe, Pramerica’s Head of UK Transactions said: ''LSR has unique expertise in this specialist market. We are excited by the opportunity we see in the local shopping and convenience sectors in the UK. This JV will provide us with a well-resourced and scaleable vehicle to succeed with our investment in the sector, through the application of the combined teams’ experience and management expertise.'

Pramerica is the real estate investment and advisory business of Pramerica Financial, which is headquartered in the US.