12th Jan 2015 12:50
LONDON (Alliance News) - Ground Rents Income Fund PLC Monday said its has agreed options to buy up to 583 residential units in six buildings for GBP3.9 million, to be funded with part of the proceeds of an equity placing.
In a statement, Ground Rents Income Fund said the agreement means it has the option to complete the acquisitions for each of the six buildings, once practical completion is achieved and the units are sold.
The sellers are Muse Developments, part of Morgan Sindall Group PLC, a UK construction and regeneration group, and its joint venture partners, according to the trust.
"The portfolio itself covers a number of assets across the country, including but not limited to, Wapping Wharf in Bristol, Chatham Place in Reading, and Vimto Gardens and Islington Wharf in the North West," James Agar, the investment director of Brooks Macdonald Funds, the trust's investment adviser, said in a statement. "These assets will allow GRIF to increase the assets under management over the next six months as these schemes are completed and sold, providing further forecastable, defensive income to the REIT and its shareholders," Agar added.
The financing of the acquisitions, which are expected to complete over the course of the year, is to come from a raising of up to GBP9 million before expenses in a share issuance priced at 107 pence per share.
Earlier on Monday, the trust said it would use the funds to complete a pipeline of investments, including a number of option agreements, which it said would provide its shareholders with further "high-quality, income-producing assets".
Ground Rents Income Fund is planning to issue up to 8.5 million new shares in the placing, while it said the issue price of 107 pence represents a 2.6% premium to its last reported net asset value of 104.3 pence per share at the end of September 2014.
The company also said that it has agreed a short term debt facility of up to GBP5 million, to fund working capital and exercise a number of option agreements over assets currently under construction, which have been agreed over the last 12 months.
The placing is being led by N+1 Singer, which will commence a bookbuilding process to determine the level of demand from potential investors for the the placing.
Ground Rents Income Fund shares were untraded Monday morning. The stock was last traded at 107.88 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
Update by Samuel Agini; [email protected]; @samuelagini
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