London & Stamford to move to LSE Main Board, acquire LSI Management for £55m

Guernsey incorporated London & Stamford Property Ltd (LON:LSP) has announced its intention to move its listing from the AIM market to the Main Board of the London Stock Exchange with a view to convert to the UK-REIT (Real Estate Investment Trust) status.
London & Stamford said the move was warranted by its market cap, which currently stands at £582 million, and would help it gain access to a broader range of investors and thus improve liquidity.
The company will enter the REIT regime upon admission to the Main Board. The REIT status will allow the company to be exempt from future corporation tax on both rental profits and chargeable gains on disposal of investment properties.

LSP is not currently eligible to elect for group UK-REIT status due to the fact that its shares are not listed on a recognized stock exchange and it is not a UK resident.

“We believe that converting to a REIT, moving to the Official List and internalising management is the best way forward for shareholders. We are pleased to be announcing these proposals which we believe will enable us to enhance shareholder returns as we continue to grow the business and take advantage of the significant opportunities we see to deploy LSP's capital at attractive long term cash yields,” said chairman Raymond Mould.
The company also announced plans to buy LSI Management LLP, which currently provides it with property advice and management function, for £55 million, to be paid in new shares in the company. Following the acquisition, the management team will hold 9.1% of the issued share capital of the company.
The move is aimed at reducing the group’s ongoing administrative costs in respect of fees paid under the property advisory agreement, which totalled £10.8 million in the year to 31 March.
The switch to the Main Market and the acquisition are now subject to shareholder approval.