London: 5 March 2012
The Local Shopping REIT plc
THE LOCAL SHOPPING REIT AND SCHRODERS
LAUNCH £60 MILLION LOCAL RETAIL FUND
The Local Shopping REIT plc. ("LSR" or the "Company"), a UK real estate investment trust focused on investments in local shopping assets, is pleased to announce that it is combining with Schroders to create a £60 million unlisted fund to invest in convenience retail opportunities. Local Retail Fund (the "Fund") will be an English Limited Partnership managed by Schroders and strategically advised by LSR, market leaders in the niche market of convenience and local shopping.
Structured with a Jersey PUT feeder, the Fund will be ungeared and will have an income based focus. LSR will have a strong alignment of interest through a £5 million co-investment and a performance related fee basis in addition to base management fees.
The Fund, which is exclusive to Schroder Property Multi-Manager clients, will have a five year life and will target convenience retail stores, such as Tesco Express and Sainsbury's Local, with adjacent units let to national multiples and local retailers. The expected target investments of circa £1 million will provide a diversified portfolio and it is anticipated that target investments will provide an average net initial yield of 6.5%. The Fund will also be seeking to identify properties which will offer additional asset management opportunities for LSR to exploit to enhance each asset's capital value and income stream.
Mike Riley, Joint Chief Executive Office of Local Shopping REIT plc, commented:
"The creation of Local Retail Fund is consistent with our business strategy of building revenues from joint ventures and asset management for third parties. We've been very impressed with the efficiency and thoroughness of Schroder's due diligence and are looking forward to working closely with them to create value for their investors.
"Tenant demand for convenience and local shopping assets from both national operators (in particular, supermarkets) and independent traders is holding up well and we look forward to using our specialist management skills and experience of stock selection to work alongside Schroders to build a strong presence in this niche, but growing, sub-sector of the retail market."
Graeme Rutter, Co-Head of Schroder Property Multi-Manager, comments:
"This is another example of Schroders creating exclusive products for our clients around exceptional property managers like LSR. Local Retail Fund will be available to our segregated mandate clients and will be a significant holding for our Real Income Fund, which targets resilient income streams and tenants with pricing power in an environment of modest economic growth."
For more information, please contact:
The Local Shopping REIT plc
Mike Riley / Nick Gregory
Tel: 020 7292 0333
FTI Consulting (for LSR)
Stephanie Highett / Richard Sunderland / Olivia Goodall
Tel: 020 7831 3113
Graeme Rutter / Tony Doherty
Tel: 020 7658 6000
About The Local Shopping REIT
The Local Shopping REIT plc ("LSR") is the first specialist start-up Real Estate Investment Trust ("REIT") to launch in the UK.
Already a major owner of local retail property, the Company is building a portfolio of local shops in urban and suburban areas, investing in neighbourhood and convenience properties throughout the UK. Typical of the portfolio are shops in local shopping parades and neighbourhood venues for convenience or 'top-up' shopping. As at 31 January 2012 the Company's directly owned portfolio comprised 647 properties, with over 2,000 letting units. In addition, the Company intends to deploy its unique set of specialist asset management skills in the management of third party assets and joint ventures, building upon its current mandates with a number of leading institutions.
For further information on LSR, please visit www.localshoppingreit.co.uk
About Schroder Property
Schroders has managed property funds since 1971 and has £9.5 billion (EUR 11.0 billion / US$14.7 billion) of gross property assets under management (at 30 September 2011) and has over 90 property staff located in 9 offices across Europe.
Schroder Property manages a broad range of open and closed-ended property funds, offering investors exposure to both diversified and sector focused portfolios, with differing risk and return profiles. Investors can choose between single country funds and regional funds. Schroder's property multi-manager team have run separate accounts and pooled funds since 1997. Schroders also provide a range of property securities funds to give access to global markets.
All of the property funds referred to are unauthorised collective investment schemes as defined in the Financial Services and Markets Act 2000. Promotion of these funds is restricted and access to full information about these funds is only available to those exempt from the restriction.
For further information about Schroders' property business visit www.schroderproperty.com
Schroders is a global asset management company with billion £182.2bn (€211.6 billion, $283.9 billion) under management as at 30 September, 2011. Our clients are major financial institutions including pension funds, banks and insurance companies, local and public authorities, governments, charities, high net worth individuals and retail investors.
Schroder Property Investment Management Limited and Schroder Investment Management Limited are authorised and regulated by the Financial Services Authority.
Issued by Schroder Property Investment Management Limited. Registration no. 1188240 England.