Share sale as fund targets £100m investments

Simon Donohue

Ground Rents Income Fund, a listed real estate investment trust managed by Hale-based Braemar Estates, is to raise £50m through a new share placing.

The placing is expected to complete before the end of April and will be subject to shareholder approval at a general meeting in May.

The company said it had chosen a convertible preference share issue so that "current shareholders are not unfairly diluted by a straight capital raise".

The additional placing is part of a plan to increase the fund's total investment assets to approximately £100m.

Providing a trading update for the first quarter of 2013, GRIF said it had now invested around £34m of the £50m raised through its flotation in August 2012.

Further transactions worth £10m have been agreed and are in legal due diligence, GRIF added.

Investments include the Gateway, pictured, a mixed-use development in Leeds bought for £2.4m in January and comprising 552 residential apartments, the Etap hotel and retail units.Gateway

The company purchased a further portfolio of ground rents consisting of 541 units throughout the North West and Midlands for £2.4m from Morris Homes, generating annual income of approximately £130,000.

James Agar, investment director of Braemar Estates, said: "Progress since the initial public offering has been ahead of our expectations and we reached the 50% invested milestone in December 2012.

"We have some excellent visibility for the next £50m worth of investment and anticipate further large scale portfolio assets being added to the portfolio in due course."

Malcolm Naish, chairman of GRIF, said: "GRIF has performed ahead of expectation in difficult market conditions."

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