Schroder Real Estate : SREI – placing and acquisition

On 9 January 2014 Schroder Real Estate raised £17.2m by issuing 35.6m new shares at 48.25p. The money has been used to buy the Arndale Centre in Headingley, near Leeds, for £16.2m. They bought the centre from the receivers.

The Arndale Centre is a 125,834 sq ft retail, leisure and office estate. At the moment it generates an annual rent of £1.57m which will rise to £1.69m when a number of rent free deals expire. This works out as a net yield of 8.73% per annum on the acquisition cost plus non-recoverable expenses. SREI hope the centre will benefit in future as it is next to a proposed Trolley Bus Station which will link other areas in Leeds to the site.

SREI is looking at other acquisitions. After the deal it has £15m in the bank and a loan to value ratio of 40%.

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