Formation of Joint Venture
8 March 2011
CAPITAL & REGIONAL PLC:
THE WATERSIDE SHOPPING CENTRE LINCOLN,
FORMATION OF JOINT VENTURE WITH KAROO
Following the announcement of the completion of the purchase of The Waterside Shopping Centre ("Waterside") on 22 February 2011, Capital & Regional (the "Company") today announces that it has conditionally exchanged contracts with Karoo Investment Fund II S.C.A. SICAV-SIF ( "Karoo") to form a 50:50 joint venture by selling 50% of its interest in the Waterside to Karoo ("the Disposal").
Karoo is a Luxembourg domiciled investment fund which invests in real estate indirectly through listed and unlisted property vehicles, as well as directly through property joint ventures.
As Capital & Regional and Karoo have common significant shareholders the formation of the joint venture is conditional upon the approval of Capital & Regional's shareholders. A shareholder circular is being posted today convening a General Meeting to be held on 1 April 2011.
Establishing this joint venture provides Capital & Regional with additional firepower to carry out further acquisitions whilst increasing the investment and income returns from its in house asset management teams.
The Company acquired the Waterside for £24.8m, at a 7.68% net initial yield, utilising debt funding from Deutsche PostBank of £13.64m.
The Company acquired the Waterside through an English Limited Partnership consisting of a General Partner and two equal Limited Partners. In order to form the joint venture, the Company has agreed to sell the entire share capital of one of the Limited Partners and 50% of the share capital of the General Partner to Karoo.
Under the terms of the Disposal it has been agreed that Karoo will fund approximately half of the total costs and related expenses incurred by Capital & Regional in acquiring the Waterside. Accordingly, the total amount payable by Karoo will be approximately £6.4 million comprising a purchase price for the shares being sold of approximately £57,500 (assuming completion of the Disposal occurs on 8 April 2011) and, in addition, Karoo will repay £6.35 million of financing provided by the Company to complete the purchase of the Waterside. The Company will use the proceeds received to facilitate future acquisitions and for general corporate purposes.
A copy of the circular, following expected publication later today, will be available for inspection at the registered office of the Company at 52 Grosvenor Gardens London SW1W 0AU during normal business hours on any business day with effect from today and up to and including the conclusion of the General Meeting. In addition, the circular will be submitted to and made available on the National Storage Mechanism (which can be accessed at www.hemscott.com/nsm.do) and will shortly be available to view on the Company's corporate website (www.capreg.com).
Hugh Scott-Barrett commented "I am delighted that we have agreed to form a joint venture with Karoo. I very much look forward to working with our new partners not only on the many asset management opportunities in Lincoln, but also on further transactions in the future".
For further information:
Capital & Regional:
Hugh Scott-Barrett, Chief Executive Tel: 020 7932 8121
Kenneth Ford, Executive Director Tel: 020 7932 8050
Charles Staveley, Finance Director Tel: 020 7932 8000
Maitland
Martin Leeburn Tel: 020 7379 5151
Richard Farnsworth Tel: 020 7379 5151
Notes to editors:
About Capital & Regional plc
Capital & Regional is an entrepreneurial 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 16.7% 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 Karoo Investment Fund II S.C.A. SICAV-SIF
Karoo is a Luxembourg domiciled investment fund which invests in real estate indirectly through listed and unlisted property vehicles, as well as directly through property joint ventures. Karoo is advised by Pinelake International Limited and Clearance Capital LLP
This information is provided by RNS