Development Securities to raise £94m for new commercial property investments

UK commercial property developer and investor Development Securities has confirmed plans to raise £94 million in a fully underwritten placing and rights issue.

The company is aiming to exploit neglected opportunities in the commercial property market where it believes a lack of funding is hindering development, the Financial Times reported.

Michael Marx, Development Securities' chief executive, commented that the money raised would be used to make deals at the more risky, "coal face" of the property market where few rivals are active and the returns could be much higher.

"There is a capital starvation that is most acute at the development end, which we can almost be alone in looking to fill," he added.

As the FT observed, Development Securities has already spent more than two-thirds of the £94 million that it raised as part of a similar strategy in July last year and expects to have invested the rest by the end of next quarter.

The company will place 4.1 million shares and issue about 36 million new shares at 250p each in order to raise the new funds.