Property group seeks pounds 18m more: Third placing for Development Securities

Development Securities is staging its third placing and open offer in nine months to part-finance a pounds 92m property portfolio acquisition.

Robert Ware, finance director, said that with net assets of pounds 83m the company had reached its desired critical mass. He had promised institutions the company would not return to the market within the next 12 months.

The acquisition of 17 mainly office and commercial properties in the South-east brings rents of pounds 7.3m, more than covering the interest payments on pounds 64m of assumed debts. The deal was struck on an initial yield of 8 per cent.

Mr Ware said the portfolio provided a range of long leases to strong tenants, including BT, the Land Registry, International Distillers & Vintners and Barclays.

The placing and open offer will raise pounds 18.3m on the basis of three shares for every 10 already held at 30p. The proceeds will fund most of an initial pounds 23m payment to the vendor, Richard Livingstone. He will also receive 10 million shares.

Development Securities has grown rapidly since Martin Landau, former head of Imry Merchant Developers, bought into Clayform, the property company that owned the Stead & Simpson shoe-shop chain, and changed its name.

Last July it raised pounds 27m through a placing and in December tapped the market for a further pounds 30m to fund a pounds 44m portfolio acquisition.

The company plans to augment recent investment acquisitions with property developments when it can secure suitable pre-let agreements.