LONDON (Alliance News) - Secure Income REIT PLC said on Thursday that major investors including Nick Leslau, Nigel Wray and Lloyds Banking Group PLC will reduce their shareholdings in the real estate investment trust, with the company now looking forward to expansion.
Secure Income REIT, which sold the freehold of Madame Tussauds in London for GBP332 million in 2015, said it intends to move to the main market of the London Stock Exchange from AIM. The company said it plans to initiate quarterly distributions to shareholders in August 2016 at a yield of 4.2% on EPRA NAV at the end of 2015.
Secure Income REIT reported a net asset value, on a European Public Real Estate Association basis, of 282.8 pence per share at the end of 2015, up 9.4% over the course of that year after incurring early debt repayment costs amounting to nearly 16% of EPRA NAV as at the end of 2014.
"Since listing in June 2014 we have successfully completed a number of significant initiatives to advance our aim of creating a REIT which pays a progressive dividend to shareholders derived from income generated by high quality real estate assets let on long leases and offering inflation protection," Chairman Martin Moore said.
"These initiatives have comprised two asset sales, including Madame Tussauds London, for over GBP380 million in aggregate, allowing us to reduce the company's levels of debt, as well as a debt refinancing of over GBP900 million to reduce finance costs and significantly extend the term of debt expiry, which was the final catalyst for the introduction of a dividend," Moore added.
All together, the selling shareholders will sell at least 77.5 million shares in Secure Income REIT, equal to a 43% stake. That could rise to 110.7 million shares, equivalent to a 61% stake, depending on demand. The placing will be priced March 22.
Prestbury Group will hold a minimum 18.3% stake in the company following the placing, Secure Income said, and controlled about 30% of the shares at the end of 2015. Prestbury Investments LLP is the manager of Secure Income REIT.
PIHL Property LLP holds the majority of Prestbury's stake in the company. Lesray LLP, a partnership between Nick Leslau and Nigel Wray, in which Nick Leslau has a 42.6% legal interest and equal share of the voting rights, owns 81.7% of PIHL.
The other selling shareholders include Prestonfield P1 Ltd, Prestonfield P2 Ltd, and Prestonfield P3 Ltd. Prestonfield Investments Ltd, a subsidiary of Lloyds Banking Group PLC's Bank of Scotland, owned a 23.6% stake at the end of 2015.
West Coast Capital, a private investment vehicle founded and funded by Scottish businessman Tom Hunter and his family in 2001, is selling shares in the placing, and currently has a 23.6% stake. Other sellers include Bluetouch Investments (Malta) Ltd and Brookstone Ltd.
The placing will be managed by Goldman Sachs International and Stifel Nicolaus Europe Ltd, acting as joint global co-ordinators and joint bookrunners, as agents for the selling shareholders.
"Today's announcement of the proposed placing marks the start of the next phase of Secure Income REIT's evolution - that of expansion," Moore said.
Shares in Secure Income REIT were up 4.9% at 264.75 pence on Thursday.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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