The Local Shopping REIT plc. ("LSR" or the "Company"), a UK real estate investment trust focused on investments in local shopping assets, is pleased to provide the following update on trading for the four months to 31 July 2011.
*Strong progress made on behalf of the JV with Pramerica Real Estate Investors:
- Three properties acquired for £4.98 million (approx. 5.65 mln.), contracts exchanged on a further four properties for £4.15 million and five additional properties under offer for £11.64 million. Should these all complete, this would bring the total value of transactions so far to over £22 million
- Ongoing success with the active asset management programme:
- Reduction in the overall void rate to 10.8% (March 2011: 11.1%; July 2010: 11.7%)
- 34 previously vacant units let, generating a total annualised rent of £300,730, in line with or above Market Rent:
- Encouraging progress in growing rents through rent reviews and lease renewals:
- Completed reviews on 73 units, increasing rental income by £31,433 per annum, representing an average uplift of 4.0%, and 6.3% above Market Rent
- Renewed 24 leases, increasing rental income by £7,420 per annum at an average uplift of 2.5%, and 5.4% above Market Rent
- Ongoing extraction of further value from our properties, through change-of-use planning consents and reconfiguration:
- Secured change-of-use planning consent on two vacant office suites and six vacant retail units
- Completed eight flat conversions with a further 13 under construction
- Continued selective recycling of capital:
- Disposal of two ex-growth properties for a total of £0.18 million, 23.7% above their March 2011 valuation
- Exchanged contracts to sell two further properties for £0.66 million, 11.6% above their March 2011 valuation
- Financial position (with £45.6 million of undrawn facilities and a cash generative portfolio) remains strong, ensuring the Company is well positioned to continue to build on its existing portfolio and activities.
Nick Gregory, LSR's Joint Chief Executive Officer, said: "Tenant demand for smaller local shopping assets remains resilient and our proactive approach to leasing space is reflected in the successful letting of vacant units, reducing our overall void rate, and in the encouraging progress we have made in growing rents through reviews and lease renewals. We are confident that the wide geographic spread and diversity of our portfolio of assets and tenant base, with its focus on supporting the top-up shopping needs of local communities, will continue to underpin our strong, cash generative business model."
Mike Riley, LSR's Joint Chief Executive Officer, added: "We have made strong progress in buying assets for our JV with Pramerica during the period, with a total of £22 million of properties already acquired or under offer. The expansion of third party assets under management and creation of joint ventures are a key part of our growth strategy and we are currently considering a range of other opportunities to use our unique set of specialist asset management skills to secure these mandates. These include discussions with a number of lenders who recognise the value of our business model, network and skill set as a solution to their increasing requirement to manage distressed assets."