The placing of 5 million shares with institutions at 320p each values the property investor at pounds 29.3m. Dealings begin on 15 December.
Formed in 1986 to acquire the industrial property portfolio of the former Greater London Council, the company owns 27 estates around the capital divided into 900 individual rental units, described by Alan Porter, chairman, as 'a hotel operation for small businesses'. London rents small amounts of space, typically to young businesses on short leases. The portfolio is 77 per cent let, having reached a peak of 95 per cent in the late 1980s.
The company plans to buy more of the second-line properties yet to experience the price rises enjoyed by prime City and West End buildings so far this year. Four estates bought for pounds 8.5m provide annual rents of pounds 1.15m, a 13 per cent yield.
Profits in the year to March were pounds 1.03m, up 16 per cent on the previous year but well below 1991's profits of pounds 1.47m. In the six months to September, pre-tax profits were pounds 355,000.
The company forecast a final dividend of 5p for the year to March, implying a 7p total and a 2.7 per cent yield at the placing price.
Pro forma net assets are pounds 28.8m, or 315p a share, and following the placing gearing will be about 80 per cent.Reuse content