Shaftesbury raises 149.1m
PROPERTY firm Shaftesbury has launched a 2-for-3 rights issue to raise £149.1m to spruce up London’s fashionable Soho district.
The real estate investment trust, which owns large swathes of the capital’s Chinatown and Covent Garden theatre district, plans to sell about 90.3m shares at 175p each, a discount of 53.1 per cent to the closing price on Tuesday.
Sources close to the deal said the issue was “offensive rather than defensive,” meaning that the group wanted the funds to further expand its portfolio of assets rather than to use them to repay bank borrowings.
“This rights issue will allow us to take advantage of excellent opportunities that are emerging to make strategic acquisitions in keeping with our long term investment strategy,” chief executive Jonathan Lane said in a statement.
“We believe that the acquisitions funded by this rights issue will deliver good returns for our shareholders,” he said.
The company said it would earmark the remaining funds to buy discounted properties in its core markets, where real estate is rarely offered for sale in buoyant economic conditions.
Shaftesbury said that it had already begun acquiring properties in and around Chinatown and the Berwick Street market area in Soho.
Despite the general economic downturn, the group said its business was performing well. Its net rental income was £27.2m for the six months ended 31 March 2009, an increase of £1.2 m or 4.6 per cent compared with the six months ended 31 March 2008. The group’s net asset value per share is 393p, compared with 578p last year.