Local Shopping REIT (LSR), the first specialist start-up real estate investment trust launched n the UK, is selling all its assets and returning remaining equity to its shareholders after paying off its debts.
Local Shopping REIT (LSR), the first specialist start-up real estate investment trust launched n the UK, is selling all its assets and returning remaining equity to its shareholders after paying off its debts.
LSR announced on 8 July that it had appointed Internos Global Investors as investment manager to dispose of its £173 mln (€2001 mln) portfolio of assets over time in an 'orderly liquidation'. The company's debt, curently about £130 mln, will be repaid and the remaining capital will be returned to shareholders.
LSR was founded in 2005 and floated on London Stock Exchange in 2007 as the first specialist REIT in the UK. Its initial focus was on building 'a portfolio of properties and letting units in the convenience shopping market'. Following the downturn in the UK property market LSR re-orientated its strategy to put the emphasis on active asset management.
In November 2012, the board announced a full strategic review, citing the company's rating, size, capital structure, and 'the challenge of creating a scalable business.
The conclusion of the review was that the best option was to sell the assets over time and repay creditors, with shareholders getting the remainder.
Steve Faber, head of UK markets at Internos, has been appointed as a director of LSR and designated investment manager to lead the liquidation sale process.
Internos has a total of £1.5 bn under management including six 'manager replacement' mandates.
LSR has reached agreement with Barclays Bank and HSBC Bank on the re-arranging and repayment of loans totalling £135 mln.
The company's share price was down 4 pence at 26 pence on Monday morning.
