Local Shopping REIT may be worth 34.5p per share – The Local Shopping REIT has sold or exchanged contracts for sale on 36 properties since its last update, for an aggregate price of £5.8m, a 1.1% premium to carrying value before sales costs.
16 of these properties were sold at auction, mainly in September. The aggregate sale price of these was £3.6m but sales costs of c4% will result in an aggregate realised loss on sale of circa 2.9%.
The proceeds of the asset sales have been used to repay bank debt, which was eliminated in full during July 2018. Currently, the company has £3.2m in cash reserves and sales on which contracts have been exchanged are expected to generate a further £13.8m in net sales proceeds.
Excluding properties on which they have exchanged contracts for sale, the portfolio comprises 42 properties with an aggregate carrying value of £13.6m. They are progressing a number of private treaty sales and have agreed terms, subject to contract, on 10 properties with an aggregate carrying value of £3.1m. This leaves 32 properties with an aggregate carrying value of £10.5m. They will continue to market these as individual assets and small portfolios, both in the private treaty market and by auction, during the remainder of the calendar year. Approximately half of these properties are scheduled for auction in October.
The board expects to provide a further market update following the October auctions.
The board estimates that the net realisable value of the cash and remaining property is between 33.0 and 34.5 pence per share.
LSR : Local Shopping REIT may be worth 34.5p per share