A central London-specific real estate investment trust (Reit) has launched on the alternative stock market (AIM) today.
The K&C Reit will start trading today under the ticker KCR. Reits are closed-ended companies that issue shares that are traded on a stock exchange. They invest solely in property, with the K&C Reit only planning to purchase central London residential property, which it believes represents ‘scalable business model’ and has the objective ‘to build a substantial residential property portfolio’.
The company said it will generate income and capital growth through the tax-efficient acquisition of residential property ‘special purpose vehicles’ (SPVs) ‘with inherent capital gains and then add value to the portfolio post-acquisition’.
The directors of the company said they have already identified SPVs they believe are suitable acquisition targets and ‘non-binding letters of intent are in place for opportunities of over £40 million’.
As well as the IPO the company announced it will acquire Silcott Properties for £3.6 million. The copany owns 25 Coleherne Road – a residential building in Chelsea, London comprising 10 studio apartments. The property was valued at £4 million on 22 June.
K&C chief executive Tim James, said: ‘Our plans have advanced, with our first acquisition of Silcott announced alongside our admission to AIM. Our attention is to provide investors with an opportunity to gain exposure to the Central London residential property market, one of the resilient sectors of the UK housing market over the past few decades, and to that end, we have identified, and have letters of intent in place, for properties worth in excess of £40 million.
‘We know the opportunity is there.’
He said the Reit structure means ‘we will have the ability to purchase properties at a discount to market value and will look to increase value through active asset management, aiming to generate growth in capital values and rental yields’.
He added: ‘Our management team will use their many years of expertise and will exploit our long-term relationship in the Central London residential market to build a portfolio in excess of £500 million.’
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