29 November 2010
LOCAL SHOPPING REIT LAUNCHES £100M JOINT VENTURE WITH PRAMERICA REAL ESTATE INVESTORS
London: 29 November 2010 - The Local Shopping REIT ("LSR" or the "Company"), a UK real estate investment trust focused on investments in local shopping assets, announces that it has entered into a Joint Venture (the "JV") with Pramerica Real Estate Investors, ("Pramerica"), to invest in retail parades and precincts throughout the UK. Pramerica is the real estate investment and advisory business of Pramerica Financial (NYSE: PRU), which is headquartered in the United States.
The JV is committing to up to £37 million of equity, which, with gearing, will provide a total of about £100 million to invest in the UK neighbourhood / convenience retail sector, with Pramerica committing to provide 80% of the equity (£30 million), and LSR providing the remaining 20% (£7.5 million). The JV is structured so that LSR and Pramerica act as co-investors. LSR will act as Manager and be responsible for sourcing the investments. The anticipated duration of the JV is five years, with a two year commitment period.
The JV will identify assets with significant potential for future rental growth and the opportunity to deliver added value through active asset management. The investment size per transaction will range from £1.25 million to £7 million.
The JV will focus primarily on retail parades and precincts located in suburban and neighbourhood locations where the properties are well placed to support the convenience and "top up" shopping requirements of the surrounding population.
With its nationwide coverage, extensive network of local agents and specialist "hands-on" asset management skills, LSR is uniquely positioned to own and manage smaller properties throughout the UK, both directly and on behalf of third parties. The JV is in line with LSR's stated strategy to grow its business through acquisitions and the creation of joint ventures.
The venture has agreed to purchase a property in Stanwell, Middlesex let to Sainsbury's and local tenants for £1.6m.
Commenting, Nick Gregory, LSR's Joint Chief Executive officer, said: "This joint venture provides us with increased equity to invest in our core market of local retail, while sharing the expertise and backing of Pramerica, one of the largest real estate investment firms in the world. This is an important strategic milestone for LSR, and I look forward to working alongside the Pramerica team to unlock the full potential of this market through our excellent operational expertise and infrastructure."
Mike Riley, LSR's Joint Chief Executive Officer, added: "Teaming up with Pramerica gives us the chance to capitalise on the significant value that we see in the convenience retail sector. The formation of this JV demonstrates that Pramerica has also recognised the opportunity in this market where a clear platform can be created and expertly managed. Our nationwide coverage, extensive network of local agents and specialist "hands-on" asset management skills make us the ideal partners to deliver significant returns for both the JV and our investors."
Charles Crowe, Pramerica's Head of UK Transactions also said: "LSR has unique expertise in this specialist market. We are excited by the opportunity we see in the local shopping and convenience sectors in the UK. This JV will provide us with a well-resourced and scaleable vehicle to succeed with our investment in the sector, through the application of the combined teams' experience and management expertise."
For more information please contact:
The Local Shopping REIT plc Tel: +44 (0)20 7292 0333
Mike Riley/Nick Gregory
Pramerica Real Estate Investors Tel: +44 (0)20 7766 2400
Charles Crowe/Ben Penaliggon
Financial Dynamics Tel: +44 (0)20 7831 3113
Stephanie Highett/ Richard Sunderland/ Olivia Goodall
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 July 2010, the Company's portfolio comprised 647 properties, with more than 2,000 letting units. In addition to its wholly owned portfolio 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 mandate to manage smaller properties for two UK lenders.
For further information on LSR, please visit www.thelocalshoppingreit.co.uk.
About Pramerica Real Estate Investors
Pramerica Real Estate Investors is a leader in the global real estate investment management business, offering a broad range of investment vehicles that invest in private and public market opportunities in the United States, Europe, Asia, and Latin America. Headquartered in Parsippany, N.J., Pramerica has offices in Atlanta, Chicago, New York, San Francisco, Miami, London, Lisbon, Madrid, Munich, Paris, Luxembourg, Istanbul, Singapore, Mexico City, Rio de Janeiro, Hong Kong and Tokyo along with representatives in Milan and Zurich. As of June 30, 2010, the company managed about $43.1 billion in gross real estate assets ($23.4 billion net) on behalf of more than 490 clients worldwide and ranks among the largest real estate investment managers. For more information, please visit http://www.pramericarei.com.
Pramerica Financial markets:
Pramerica Financial is a trade name used by Prudential Financial, Inc. (NYSE: PRU), a company incorporated and with its principal place of business in the United States, and its affiliates in select countries outside the United States. Pramerica Financial, a financial services leader with approximately $750 billion of assets under management as of September 30, 2010, has operations in the United States, Asia, Europe, and Latin America. Pramerica Financials diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds, investment management, and real estate services. In the U.S., the company's iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit http://www.news.pramericarei.com/ . Prudential Financial, Inc of the United States is not affiliated in any manner with Prudential plc, a company incorporated in the United Kingdom.
In the United Kingdom and various other jurisdictions in Europe, all investment activities are carried out by representatives of Pramerica Investment Management Limited ("PIML") which is authorised and regulated by the Financial Services Authority. PIML is incorporated in England (Reg. No. 3809476) and its Registered Office is at Grand Buildings, 1-3 Strand, Trafalgar Square, London WC2N 5HR. Pramerica Financial and the Rock Logo are proprietary service marks and may not be used without the written permission of the owner.