Local Shopping REIT steps up disposals
Local Shopping REIT has sold 65 properties at an aggregate price of £18.7m in the past six months as it seeks to liquidate its portfolio.
In a trading update for the six months ended 31 March, it said the sales reflected a 1.77% premium on its carrying value.
Carrying value refers to the property values in the company’s audited accounts as at 30 September 2018, adjusted for subsequent capital expenditure.
Local Shopping REIT has sold 65 properties at an aggregate price of £18.7m in the past six months as it seeks to liquidate its portfolio.
In a trading update for the six months ended 31 March, it said the sales reflected a 1.77% premium on its carrying value.
Carrying value refers to the property values in the company’s audited accounts as at 30 September 2018, adjusted for subsequent capital expenditure.
Of the ten properties remaining in the portfolio at 31 March 2019, one is under contract for sale, and terms have been agreed for three other properties. The remaining six properties are either being actively marketed or being prepared for marketing.
Nine of the remaining properties were revalued by Allsop at £3.6m, reflecting an equivalent yield of 13.98%. The remaining property was under contract for a sale at its carrying value.
At 31 March the company held £22.76m in cash. Its net asset value fell by 6.7% over the six months to £25.85m.
LSR is now seeking to return capital to shareholders by way of capital reduction and share buy-back tender offer at a price of 31.33p per share.
Stephen East, LSR’s non-executive chairman, said: “The directors will shortly send a circular to shareholders containing full details of the buy-back tender offer together with a notice of general meeting to approve the necessary resolutions.”
Thalassa made a bid to acquire LSR on 6 February. The British Virgin Islands-based firm owns 25.48% of LSR, and voted against the winding up of the REIT in December. LSR said the proposal included “significantly less” cash that the company’s proposed voluntary liquidation.
East added: “The board considered that the takeover proposal was not in the best interests of shareholders as a whole, and the bid received insufficient support from the company’s members to take effect. However, dealing with the bid was an expensive exercise, the cost of which is reflected in the interim financial statements.”
Its administrative expenses rose to £1.26m over the period, up from £552,000 for the same period in 2018. LSR reported a pre-tax loss of £1.9m, against a loss of £2.8m a year earlier.
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