Regional REIT, a new property company set up by investor London & Scottish and London and Dubai-based asset manager Toscafund, is to list on the main market of the London stock exchange.
Regional REIT, a new property company set up by investor London & Scottish and London and Dubai-based asset manager Toscafund, is to list on the main market of the London stock exchange.
The firm, which expects to start trading on 6 November, intends to place 274 million shares at a price of £1 each, equal to the pro forma EPRA Net asset value per share as at 30 June 2015.
The company plans to convert to Real Estate Investment Trust status following admission, targeting a dividend yield of 7-8%. It has been seeded with a £386 mln (€540 mln) portfolio formed by the merger of two existing Tosca funds, consisting of 128 regional assets in the UK.
The portfolio generates a rent roll of £37.2 mln per annum reflecting a yield of 9.1% with a weighted average unexpired lease term of 5.83 years and an occupancy rate of 84%.
At admission, Regional REIT will have a market capitalisation of £274 mln.
Chairman Kevin McGrath said: 'The support this new REIT has received from both existing and new shareholders is very encouraging. We are delighted that a further high quality list of blue-chip institutional investors has decided to come on-board. This underlines our belief in the exciting prospects for regional commercial property in the UK, and is a reflection of the management team’s experience and expertise in this market.'
Regional REIT is currently monitoring potential investment opportunities with a value of over £250 mln. The company will focus on investing in major regional centres and urban areas outside London, where it believes to be an opportunity on account of 'a significant mismatch' between the available yields on prime and regional secondary properties throughout the UK.
