Capital & Regional buys Aberdeen shop complex

CAPITAL & Regional Properties, the ambitious property minnow, is raising pounds 13.2m through a share placing to fund the purchase of a shopping centre in Aberdeen, writes Heather Connon.

The company is paying Norwich Union pounds 10.1m for the Trinity Centre, a 30-shop arcade with Debenham as the main tenant. Net rental income is pounds 1.16m, putting the purchase on an 11.5 per cent yield. The centre was built in 1984, but has suffered since the completion of two retail complexes - anchored by Marks & Spencer and John Lewis - nearby, which pulled tenants from the Trinity area. Some retailers have, however, recently taken space next to the centre.

Capital & Regional is placing 9.9 million shares at 140p a share with institutional investors, increasing its market capitalisation by about 50 per cent. Existing investors are able to claw back the shares on the basis of one share for every two held. Capital & Regional's shares closed down 2p at 148p compared witn pro forma net assets of 145.4p.

The group has been actively buying properties since the start of 1992, having sold half its portfolio in 1988. It is in talks about a US purchase and is considering floating its US arm, which represents half of its portfolio, to raise funds for further expansion.