Local Shopping REIT - General - UK,

Date: 10 Feb 2012

Ongoing progress in active management initiatives and further NAV growth for Local Shopping REIT

The Local Shopping REIT provides the following update on trading for the four months to 31 January 2012.

Highlights
* Ongoing asset management success:
- 38 vacant units let at a combined rent of £497,818 per annum
- Healthy letting pipeline, with 27 units under offer at a combined rental of £259,139 per annum
- Rent reviews completed on 110 units, increasing rental income by £23,116 per annum

* Four properties sold since 30 September 2011 for a total of £0.91 million at an average of 23.8% above their September 2011 valuation and contracts exchanged on a further two properties for. £0.75 million, 7.9% above their September 2011 valuation

* Good progress during the period with our acquisition programme for the Pramerica Real Estate Investors joint venture; three properties purchased for a combined £10.65 million, contracts exchanged to buy a newly built parade in Stoke-on-Trent for £0.81 million and five further properties under offer for a combined £7.11 million

* Ongoing discussions with UK lending banks regarding the management of distressed assets and with other potential joint venture partners.

Nick Gregory, LSR's Joint Chief Executive Officer, said:
"Tenant demand for smaller local shopping assets from both national operators and independent traders is holding up well. This gives us confidence that the wide geographic spread and diversity of our assets and tenant base, with its focus on supporting the top-up shopping needs of local communities, will continue to underpin our strong, cash generative business model."

Mike Riley, LSR's Joint Chief Executive Officer, added:
"Our business continues to demonstrate the ongoing relative resilience of our portfolio and the benefits that our highly specialised management skills can deliver, not only to our wholly owned assets, but also to those properties we manage for co-investors and third parties. In the coming months, we will continue to apply these skills to increase the revenues from our existing holdings, while seeking to grow our assets under management through discussions with lending banks and potential joint venture partners."

In its outlook, the Company said the business continues to demonstrate the ongoing relative resilience of the diversified portfolio and tenant base and the benefits that a highly specialised management skills can deliver. Future success will therefore be based upon the continuing effective execution of our strategy:

* Optimising the value of, and income from, existing assets
* Using our unique business platform and management skills to grow revenue, which will be achieved by:
- sales of ex-growth properties to invest in new opportunities;
- portfolio or private company acquisitions;
- the creation of further partnership vehicles aligned to our sector; and
- distressed asset management.

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