London-based Rugby Estates Investment Trust (RugbyREIT) has said it expects to resume acquiring UK property investment companies 'in the medium-term'. The company's property adviser, Rugby Asset Management, is 'maintaining a dialogue' with specific companies and it is working to identify new takeover candidates, RugbyREIT said in an interim management statement.
London-based Rugby Estates Investment Trust (RugbyREIT) has said it expects to resume acquiring UK property investment companies 'in the medium-term'. The company's property adviser, Rugby Asset Management, is 'maintaining a dialogue' with specific companies and it is working to identify new takeover candidates, RugbyREIT said in an interim management statement.
RugbyReit was incorporated in March 2007 and raised £50 mln from institutional investors in an IPO two months later. The trust's strategy is to acquire investment properties from private investment companies with latent capital gains tax liabilities and to use the REIT structure to minimise the tax bill.
RugbyREIT noted that the rate of decline in capital values in the UK real estate sector appears to have slowed in recent months. But the company said the downward trend is expected to continue for the rest of the year as the likelihood of an economic slowdown has an adverse effect on both tenant demand and rental growth prospects.
'Against this backdrop, it has been neither possible nor desirable in the past few months to agree terms to acquire any further property investment companies,' RugbyREIT said. Citing its conservative financing and sound business model, RugbyREIT said it expected over the medium term to be able to agree 'further net asset enhancing acquisitions'.
RugbyREIT has a diversified investment portfolio acquired through three corporate acquisitions. The portfolio comprises 34 properties and was valued at £81mln (EUR 102mln) in early January.
