LSE sees first REIT launch

The first specialist start-up UK real estate investment trust (REIT) has launched on the London Stock Exchange (LSE). The Local Shopping REIT (LSR) invests in UK shopping assets, particularly neighbourhood and specialist property in urban areas. It also targets good-value high street assets and claims to offer investors cost-effective access to a fragmented asset class.

LSR currently has a 207.7 million [pounds sterling] portfolio of 484 diversified assets and plans to grow this with the 160 million [pounds sterling] raised during its placing and offer. Although still a property company, LSR plans to convert to REIT status upon admission to the LSE. Martin Graham, director of markets at the LSE, said LSR is an excellent example of how the REIT regime has provided new investment opportunities. 'The highly specialised nature of its investment strategy would be difficult enough for an in-house property investment team to replicate, but until this year, a listed investment vehicle would have carried a double taxation burden,' he added.

Grahame Whateley, chairman of LSR, commented: 'We are providing a unique opportunity for investors to gain access to a strong and diverse portfolio of local shopping assets, which will benefit greatly from the expertise of our highly experienced management team.'

The REIT regime was introduced to the UK in January 2007. So far, 13 previously listed property companies have converted to REIT status, producing a combined market capitalisation of 37 billion [pounds sterling].

For more information about LSR visit www.localshoppingreit.co.uk.