Cautious London & Stamford sees some growth opportunities
Commercial property investment company London & Stamford is still in cautious mood when it comes to spending its £1bn of “firepower”, the firm said yesterday. Reporting a rise in NAV per share to 121p as of 1 October, compared with 104p a year earlier and 120p at the end of March, the company said its recent acquisitions showed that it could secure high returns while also acquiring prime assets let to good-quality covenants on long-term leases, with opportunities to add value – despite the challenging market situation.
London & Stamford said evidence of strength in occupational markets was only sporadic, although it remained optimistic about the market for City office space and also with regard to prime distribution warehouses, such as the portfolios it recently bought for £205m.
“In particular, we believe that there is a strong likelihood of rental growth in our South Eastern located distribution warehouses and those located in the Midland’s Golden Triangle where there is a supply side weakness and demand remains strong. We see some sense in seeking high-yielding assets when growth in rents is generally modest, as this offers far better returns to shareholders than low-yielding property growing equally modestly,” the company added.
It also signalled that it was among those seeking investment opportunities from banks that are working out their portfolios of troubled property loans, “as we demonstrated through our acquisition of the Radial portfolio from the Bank of Scotland,” it added. London & Stamford bought the Radial warehouse portfolio earlier this year.
Further to yesterday’s news, meanwhile, Capital Shopping Centres has revealed that Simon Property Group has approached it to ask CSC to put its Trafford Centre acquisition plans on hold while it finalises a possible cash offer for the group. CSC has however decided to go ahead with its plans, noting that there is no certainty of any such offer, and has pointed out that shareholders will be able to vote on the Trafford Centre proposals at the EGM to be held on 20 December. The Telegraph has recently written about the reasons why prime shopping centre properties are in such demand at the moment, while high-street properties and secondary shopping centres seem to be “somewhat in the doldrums”.
