Sale of Vauxhall Square

RNS Number : 6804B

CLS Holdings PLC

05 April 2017

 

CLS Holdings plc

("CLS", the "Company")

Sale of Vauxhall Square, London SW8

CLS Holdings plc announces that it has exchanged contracts for the unconditional sale of the site of its proposed mixed-use Vauxhall Square development ("Vauxhall Square") to R&F Properties, a large Chinese property developer listed on the Hong Kong Stock Exchange, for a gross consideration of £157.77 million. 

R&F Properties will assume CLS's obligations for the relocation of the hostel at 62 Bondway, resulting in a net consideration of £144.1 million, which will be received in cash at completion.  It is expected that completion will be on or around 4 May 2017.  The Company will retain the freehold interest in the Miles Street student accommodation block (having sold a long leasehold interest for £24.8 million in December 2015) and residential houses in Wandsworth Road.

At 31 December 2016, Vauxhall Square was valued at £100 million and in 2016 generated net rent of £1.9 million.  The rent has since reduced to £0.1 million p.a. following the expiry of a lease with Cap Gemini.  

CLS will make a profit on disposal of approximately £40 million after costs, which will add some 70 pence to pro forma EPRA NAV.  There is no debt secured against the site and it is anticipated that the full sale proceeds will be re-invested in the Company's core business.

Henry Klotz, Executive Chairman of CLS, commented:

"The sale of Vauxhall Square is a milestone in the history of CLS.  Having bought the site nearly 30 years ago and secured planning in 2013, we are pleased now to have exchanged contracts at a price above its year end valuation.  

"R&F Properties has extensive residential development experience and we are delighted that it will soon create a vibrant residential, office and retail development to enhance Vauxhall, an area in which we retain over £330 million of long-term investments.

"We intend to reinvest the proceeds in our core business: high yielding offices with good asset management opportunities within key European cities".

For further information, please contact:

CLS Holdings plc     
www.clsholdings.com   
[phone]
 

Sten Mortstedt, Executive Director & Founding Shareholder

Henry Klotz, Executive Chairman

Fredrik Widlund, Chief Executive Officer
John Whiteley, Chief Financial Officer

Liberum Capital Limited
[phone]
Richard Crawley

Jamie Richards

Panmure Gordon (UK) Limited
[phone]
Dominic Morley
Andrew Potts

Elm Square Advisers Limited   
[phone]
Jonathan Gray

Smithfield Consultants (Financial PR) 
[phone]
Alex Simmons

This announcement contains inside information. The person responsible for arranging the release of this announcement on behalf of CLS is David Fuller, Company Secretary.

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