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Schroder property trust targets £40m for acquisition spree
by Dylan Lobo on Mar 21, 2014 at 07:45
The Schroder Real Estate Investment Trust is issuing 80 million shares to fund a new acquisition strategy.
Subject to shareholder approval, the trust aims to raise £40.2 million through the placing to support its acquisition strategy running from 18 April to 19 March.
The shares have been issued at 50.25p per share, a premium to the prevailing NAV which the company said ensures future fund raises are accretive to the prevailing NAV for existing shareholders.
The firms plans to use the new equity to invest in properties which offer an attractive yield, with the pipeline of potential acquisitions currently under negotiation.
The acquisitions are likely to target all the main property sectors, including, office, industrial and retail as well as alternatives to these traditional sectors.
Commenting on the placing. Schroder head of property Duncan Owen said: 'This disciplined approach to growth will enable us to issue new shares at a premium to the prevailing NAV as well as ensuring future fund raises are only accretive to the NAV for existing shareholders.
'Furthermore we expect this transaction will provide additional liquidity in the company's shares through a larger market capitalisation accompanied by a reduction in the level of borrowings and greater economies of scale.'
He added: 'The company has consistently outperformed its direct property peers since IPO and we understand shareholders' are keen for the company to grow further.
'We anticipate that this transaction will enable the company to capitalise on the opportunities that exist with the UK commercial property market against a backdrop of improving market conditions.'
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