London & Stamford closes in on Reit status

London & Stamford Property, the property investment company, has accelerated its move to become the UK’s next real estate investment trust after posting a strong rise in the value of its assets in a last full year on Aim.

London & Stamford, which said that it would become a Reit by September this year, increased net asset value by 17.4 per cent to 120p a share in the year to March 31.

The company has been one of the canniest investors since the end of the property crash this time last year, striking a number of deals that have proven immediately accretive. It made a 85 per cent equity return on the acquisition and quick sale of No.1 Whitehall Riverside in Leeds, for example, while its purchase of half of the Meadowhall shopping centre also looks smart, given the subsequently uplift in values.

During the financial year, LSI made five acquisitions for a total of £199m ($290m), and subsequently acquired Radial portfolio from Warner Estates for £208m in May.

Patrick Vaughan, who manages the company, said the market looked to have gone up “too far, too fast”, which had meant a cautious acquisitions policy. He said: “We will have to be a bit more adventurous. It is harder to secure good real estate but not impossible.”

LSI indicated its intention to exploit opportunities for larger-sized deals and complex portfolios. LSI has been linked with a bid for the properties backed by a £1.1bn securitised debt transaction called White Tower, with final bids due in on Thursday on the sale.

The company has cash of about £200m, which gives leveraged spend power of about £800m. The shares closed up 4.15 at 121p.4p.