London & Stamford Property Plc (LSP), co- owner of one of the U.K.’s largest malls, plans to create a 200 million-pound ($312 million) venture with two partners to buy homes in the center of the U.K. capital.
London & Stamford will own 40 percent of the venture, according to a statement today. Green Park Investments, its Middle Eastern partner, will own 30 percent of the shares, while the remaining 30 percent will be owned by an unidentified partner, London & Stamford said.
Luxury-home prices in central London rose the most in 10 months in March, according to broker Knight Frank LLP. London & Stamford’s new venture is close to buying homes valued at 150 million pounds and is also in talks with undisclosed banks about loans with which to make purchases.
The company wants the U.K. treasury to eliminate a tax on dividends paid from one real estate investment trust to another, which would make the new residential fund more profitable. London & Stamford today reported earnings per share of 4.4 pence for the 12 months through March, up from 3 pence a year earlier, and said it plans to raise the annual dividend.
“We continue to explore the possibility that ultimately our Central London Residential Joint Venture can become a residential REIT,” London & Stamford said in the statement.
The real estate investment trust may sell existing residential assets, the statement showed. London & Stamford owns homes in London areas such as Islington and Battersea.
Goldman Sachs Group Inc. (GS) will break its lease at the One Carter Lane office building in the City of London which will become vacant next March, according to the statement. The building will then be refurbished and leased to a new tenant in 2014, London & Stamford said.
The London-based landlord plans to sell its 15.7 percent stake in Meadowhall Shopping Centre in Sheffield, northern England, the statement showed.
To contact the reporter on this story: Neil Callanan in London at email@example.com.