Update on Property Sales Programme

RNS Number : 1038P

Local Shopping REIT (The) PLC

24 May 2018

 

The Local Shopping REIT plc

Update on Property Sales Programme

The Board of The Local Shopping REIT plc ("the Company") is pleased to announce that it has exchanged contracts for the sale of a portfolio of 7 properties, for a cash consideration of £3.74 million.  We have also agreed terms with the same purchaser for the sale of a further 8 properties, subject to pre-emption rights of residential tenants under section 5 of the Landlord and Tenant Act 1987.  The statutory notices to qualifying tenants will be served shortly and the Company expects to proceed to exchange contracts for the sale of these properties (either to this purchaser or to those tenants who elect to exercise their pre-emption rights) at the expiry of the statutory notice period.  It is expected that the total sale price for these 8 properties will be £5.31m. 

The aggregate consideration for the sales of the 15 properties of £9.05 million is expected to reflect a 2.6% discount to the carrying value of the assets.  The sales costs associated with these disposals are estimated to be 1.6%, including agent's fees, legal fees (including the service of statutory notices) and associated irrecoverable VAT relating to non-VAT elected properties or residential elements.  This is estimated to result in a 4.2% realised loss on sale for these properties.

In addition to these portfolio transactions, since the last update on the sales programme on 6 April 2018, the Company has sold 18 properties for an aggregate price of £2.78 million, representing a 2.4% premium to carrying value.  The sales costs associated with these disposals are estimated to be 4.3%, resulting in a 2.0% realised loss on sale for these properties.

The net sales proceeds for these sales will be used in repayment of the banking facility, the balance of which is expected to be eliminated by 30 June 2018.

The transactions described above bring total property sales, contracted or completed, under the Company's realisation strategy to £137.1 million, with 551 assets sold.  In addition to which are the 8 anticipated property sales, totalling £5.3 million, that are subject to section 5 pre-emption rights as described above.

We continue to work on disposals, with approximately 40 properties scheduled for auction before the end of the current financial year.  A number of private treaty sales, including small portfolios, are also in hand. 

[ENDS]

Enquiries:

Rupert Wallman, Fund Manager                                                        [phone]

Bill Heaney, Company Secretary                                                        [phone]

 

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