Aim-listed K&C Real Estate Investment Trust (REIT) saw its shares shoot up by 28 per cent this morning, as it announced it would raise a new £150m and prepare for a listing on the premium section of the London Stock Exchange.
The REIT, which invests in UK residential property, will raise the money by issuing shares at £1 apiece. It will also consolidate its existing share capital by turning every 10 existing ordinary shares into one new ordinary share.
K&C added today that Duncan Walker, former investment director at property developer Helical, would join as a non-executive director.
“To fully capitalise on the investment opportunities that we are seeing across the UK market, the Company is seeking to raise the funds required to scale up,” said K&C REIT's chief executive Dominic White.
“With stable and growing rental incomes generating strong yields, the UK private rented residential market is a highly attractive sector.”
The investment trust added that it had “successfully demonstrated the concept of using a REIT structure to acquire residential property at a significant discount to market value”.
K&C has an identified acquisition property pipeline of more than £400m in the UK residential private rented sector, and has agreed new debt facilities of up to £100m to help fund its upcoming deals. The new capital will also be used to pay off K&C's £4.08m of existing debt.
Despite its successes, the REIT is also proposing to change its name to KCR Residential REIT.
K&C listed in 2015, and days later acquired Coleherne for £3.63m. Coleherne's only asset was a west London property, which has now been valued at £4.2m.
In 2016, K&C acquired Osprey for £1.6m and this summer added on three additional apartments for £935,000. Together these have now been valued at £4.4m, a 73 per cent increase on the aggregate purchase price.