Schroder REIT to place over 35m shares to fund acquisitions

8th Jan 2014 11:26

Schroder Real Estate Investment Trust (REIT) on Wednesday announced plans to place up to 35.59m new ordinary shares, equal to 10 per cent of its issued share capital. The group said the shares would be issued at a premium to the most recent net asset value per share. The proceeds of the placing will be used for acquisitions, specifically that of a mixed retail, leisure and office property located on the edge of a major regional city for approximately £16.5m. The funds may also be put towards the acquisition of a mixed leisure and office property, which it intends to acquire for around £8m if due diligence is successfully completed. The placing comes after the company noted a "pronounced improvement" in sentiment towards the UK commercial property market, which led to increased capital flows into the sector. "The current stage of the recovery is notable for improving sentiment towards good quality secondary property outside of the core Central London markets," Schroders said. "This is partly due to the yield premium available but also reflects an improving occupational market in some regions, as a result of economic growth and reducing levels of new supply." It explained these conditions have provided the company with increasing deal flow, offering potential total returns consistent with its investment objective. NR