Local Shopping REIT has sharpened its focus on managing distressed assets as banks release more struggling properties onto the market.
The REIT increased its annual rent roll of properties under management to £1.38m in the four months to 31 July, up from £0.9m at the end of March.
LSR’s partnerships with Pramerica Real Estate Investors and Schroders gathered momentum during the quarter. The REIT acquired seven properties for Pramerica with a combined value of £13.2m, bringing deals completed up to £36.3m to date. LSR also made its first acquisitions for the fund created with Schroders in March this year for a combined total of £3m, and is eying a further eight properties with a total value of £7m.
The REIT reported a void rate of 11% during the quarter, up slightly from 10.6% at the end of March. However, some of these voids are deliberate, as LSR looks for “opportunities to add value through change of use and other asset management initiatives”, according to this morning’s interim management statement.
There has also been a slight rise in the core commercial void rate, which edged up from 7.6% for the previous quarter to 7.8%, as the REIT took a more “robust” approach to removing struggling tenants.
Investec Bank analysts rated LSR as a “buy” in a note this morning, citing strong asset management performance.
sophia.furber@estatesgazette.com
