11th Nov 2015 15:56
LONDON (Alliance News) - Schroder European Real Estate Investment Trust PLC on Wednesday said it is looking to raise up to GBP150.0 million in an initial public offering on the main market of the London Stock Exchange and the main board of the Johannesburg Stock Exchange.
Managed by Schroder Real Estate Investment Management Ltd, part of FTSE 100 asset manager Schroders PLC, the new trust will invest in commercial real estate in Continental Europe. The plan is for the trust to issue 150.0 million shares at 100 pence each.
The trust's aim will be to provide shareholders with a "regular and attractive" level of income return and the potential for long-term income and capital growth.
The investment manager, which currently manages GBP2.0 billion of mandates in Continental Europe, said it has identified "key target centres" in the Eurozone region where there is "evidence of rental growth" due to constrained supply and rising demand.
The trust will target a dividend yield of 5.5% per annum based on the issue price of the IPO, and will use "modest" gearing - a term for borrowing - with the aim of boosting returns for shareholders. Leverage will be capped at a 35% loan-to-value ratio - a measure of the debt used to acquire a property against the value of the asset.
The Schroders Group will be subscribing for 10% of the shares in the real estate trust. The results of the IPO are to be published on December 3.
Following the IPO, the trust will be able to issue up to an additional 100.0 million new shares without having to offer them to existing shareholders.
Numis Securities is the sponsor, broker and placing agent for the IPO in the UK, while PSG Capital is sponsor and placing agent in South Africa.
By Samuel Agini; [email protected]; @samuelagini
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