Acquisition

RNS Number : 4036C

Capital & Regional plc

01 May 2012

 

1 May 2012

CAPITAL & REGIONAL PLC:

THE KINGFISHER SHOPPING CENTRE REDDITCH

Capital & Regional ("C&R") announces the unconditional exchange of contracts to purchase The Kingfisher Shopping Centre ("The Kingfisher Centre") in Redditch with its capital partner, an affiliate of funds managed by Oaktree Capital Management, L.P., a subsidiary of Oaktree Capital Group, LLC ("Oaktree").

The acquisition, which is expected to complete later today, will be made through a new joint venture vehicle formed specifically for this purpose.

The Kingfisher Centre is being acquired for £130 million, representing an 8% net initial yield, from clients of Scottish Widows Investment Partnership ("SWIP").

Kingfisher is a dominant sub regional mall, occupying a 27 acre site and extends to approx. 1 million sq ft of retail accommodation. This is supported by 2,800 car parking spaces, an integrated bus station and an adjacent rail station.

Anchor retailers include Debenhams, M&S, Primark, Next, Arcadia and TK Maxx. An Apollo multi screen cinema provides a leisure focus.

The Centre produces a current net income of £11 million per annum. Within the scheme, Zone A rental values range from £65 to £75 per sq ft.

The current occupancy including strategic voids is 95.9%.

The weighted unexpired lease term is 9 years, 11 months.

C&R have established demand from both retail & leisure operators who are either not currently represented in Redditch or who wish to reformat their existing stores. C&R's asset management plan identifies opportunities to satisfy that demand and to reposition the centre in the minds of shoppers and retailers alike, by building on the existing footfall of almost 200,000 per week.

The acquisition is funded by investments of £10.6 million and £42.4 million from C&R and Oaktree respectively, representing equity shares of 20% and 80%. The remaining funding will be provided by The Royal Bank of Scotland and Santander through a 5 year, £86 million debt facility. C&R's investment will be made from existing resources.

Hugh Scott-Barrett, Chief Executive of Capital & Regional commented:

"This is an exciting acquisition for Capital & Regional which is consistent with our strategic focus on UK retail, and dominant, community shopping centres in particular.

Kingfisher is a classic C&R centre sharing many of the investment and retail characteristics of The Mall Fund's core assets. Delivery of our Business PIan will generate attractive returns which will be enhanced by asset and property management fees. I also welcome our partnership with Oaktree. The team and I look forward to working with them to realise our joint ambitions for The Kingfisher Centre."

John Brady, Head of Oaktree's Global Real Estate Business says:

"Oaktree is excited by the acquisition of The Kingfisher Centre and its new partnership with Capital & Regional. The acquisition of The Kingfisher Centre is reflective of Oaktree's commitment to increase its dedicated real estate resources focussed on the UK and Europe".

For further information:

Capital & Regional:
Hugh Scott-Barrett, Chief Executive	Tel:  [phone]
Kenneth Ford, Executive Director	Tel:  [phone]
Charles Staveley, Finance Director	Tel:  [phone]
Maitland
Martin Leeburn	Tel:  [phone]
Daniel Yea	Tel:  [phone]

Notes to editors:

About Capital & Regional plc

Capital & Regional is a specialist retail property company with a track record of developing asset management opportunities in town centre shopping centres and out of town retail parks.

Capital & Regional founded The Mall and The Junction funds in conjunction with Aviva Fund Management.  Capital & Regional acts as Property and Asset Manager for the Mall and Junction funds and holds 20.1% and 13.4% respectively of these funds.

Capital & Regional & AREA Property Partners each hold a 50% interest in a German retail property portfolio which is managed by Garigal Asset Management GmbH, in which Capital & Regional holds a 30% interest. 

Capital & Regional also has an 11.9% stake in the X-Leisure fund, which is managed by X-Leisure Limited in which Capital & Regional holds a 50% interest.

Capital & Regional has a number of other joint ventures and wholly-owned properties.

For further information see www.capreg.com

About Oaktree

Oaktree is a leading global investment management firm focused on alternative markets, with $74.9 billion in assets under management as of December 31, 2011.  The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in distressed debt, corporate debt (including high yield debt and senior loans), control investing, convertible securities, real estate and listed equities. Headquartered in Los Angeles, the firm has over 650 employees and offices in 13 cities worldwide. For additional information, please visit Oaktree's website at www.oaktreecapital.com.

 

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