A newly-formed real estate investment trust (Reit) hoping to cash in on the property market revival in the regions is poised to launch on London’s stock market with a value of around £274m.
Regional Reit, a joint venture partnership between London & Scottish and hedge fund Toscafund, will tomorrow apply for a main market listing and the placing of secondary shares, City A.M. understands.
It has priced its shares at 100p per share, giving the company a market value equal to its pro-forma net asset value (NAV) at the end of June of £274m. Sources said the offer is already fully subscribed with several blue-chip investors on board.
Regional Reit is being created out of the merger of two existing offshore funds run by London & Scottish and Toscafund. It currently owns around 130 commercial properties in cities including Manchester, Glasgow and Leeds, which together are worth around £386m.
The commercial property market in cities outside of the capital have enjoyed a resurgence in activity over the last two years thanks to the improvement economy and a rise in employment.
Record high prices in the capital have also forced investors to look further afield for better returns and higher returns, with well-located shopping centres, offices and industrial units all being targeted. Meanwhile limited development in the regions since the recession has boosted rental income.
Data from Savills shows around £10.5bn has been invested in real estate outside the capital by international investors alone in the first eight months year, with the estate agent predicting a further £3.5bn before the end of the year.
Regional Reit is targeting £250m of acquisitions following its listing, sources said, with shares expected to start trading this Friday.