The Local Shopping REIT plc
Update on Property Sales Programme
The Board of The Local Shopping REIT plc ("the Company") is pleased to provide the following update on progress with its property sales programme.
During the round of auctions in July 2017, the Company exchanged contracts for sale on 19 properties for an aggregate price of £3.3 million, representing an 8.1% discount to carrying value before sales costs. Since the last update on the property sales programme, the Company has also completed or exchanged for sale on a further 4 properties for an aggregate price of £0.56 million, at a 3.4% discount to carrying value.
The sales costs associated with these disposals is estimated to be 4.1%, including agent's fees, legal fees and associated irrecoverable VAT relating to non-elected properties or residential elements. This will result in an estimated 11.2% realised loss on sale for these 23 properties.
This brings total property sales, contracted or completed, under the sales strategy adopted in July 2013 to £112.4 million. Overall, sales to date have produced a gross premium (before sales costs) of 2.5% above the valuation at the time sale terms were agreed.
Since the sales programme was accelerated (as announced in December 2016), the Company has disposed of a total of 126 properties, for an aggregate gross sales price of £17.8 million. The gross loss on these sales has been 1.8% below valuation.
The next full round of auctions is in October. During the intervening period the Company will continue to execute the sale programmes as set out in the Roadmap for Property Disposals published in December 2016. The Board and Investment Adviser are pleased that the Company continues to be well placed to meet the timetable contained therein.
The Board confirms that in accordance with the Investment Advisory Agreement entered into with the Company's Investment Adviser, INTERNOS Global Investors Limited ("INTERNOS"), in July 2013, the base Asset Management Fee payable to INTERNOS will no longer be subject to an annual minimum of £900,000 after 22 July 2017. From that date the base Asset Management Fee is calculated as 0.70% of Gross Asset Value (GAV), and will therefore decline as assets are sold and debt is repaid. For the purpose of this calculation, GAV was £77m at the time of the latest published accounts (31 March 2017).
Rupert Wallman, Fund Manager +44 20 7355 8800
Bill Heaney, Company Secretary +44 20 7355 8800