Announces Hilton London Wembley joint venture

RNS Number : 2830B

Quintain Estates & Development PLC

02 April 2013

 



2 April 2013

Quintain Estates and Development PLC

("Quintain" / "Company" / "Group")

Quintain announces Hilton London Wembley hotel joint venture

2012/13 disposals programme realises total of £185 million

Quintain today announces the sale of a 50% interest in the 361 bedroom, four star Hilton London Wembley Hotel to OCM Wembley Holdings Sarl, a company owned by funds managed by Oaktree Capital Management L.P. ("Oaktree").

Quintain's gross proceeds from the transaction are £30.1 million, which is in line with the valuation at 30 September 2012 for a 50% interest in the property. Under the terms of the transaction, Oaktree will receive a preferred return, with Quintain receiving an increasing share of the income stream once the preferred return has been paid. The new Hotel, which opened in July, sits at the heart of Quintain's wider Wembley regeneration scheme. The Company expects to benefit from this income stream from the beginning of the 2014/15 financial year.

It is the intention of the partners to introduce non-recourse senior debt to the joint venture in due course to re-finance part of their equity investment.

In addition to this transaction, in the final quarter of Quintain's financial year a series of disposals has been completed. These include: seven retail units at Greenwich Peninsula for £4.9 million; an office building in Guernsey for £7.0 million; and, as reported in the third quarter Interim Management statement, a portfolio of 34 residential units at Wembley for £7.5 million on deferred terms. These transactions bring the total amount realised from disposals and capital recycling during the financial year to approximately £185 million.

The Hilton London Wembley is next to the iconic Wembley Stadium and Wembley Arena and 45 minutes from London Heathrow. It is adjacent to the London Designer Outlet ("LDO") which will open later this year. The LDO will be the only shopping mall of its kind within Greater London and enjoys the most affluent catchment of any outlet centre in the UK. Its 1,800-seat cinema, 85 shops and 15 bars and restaurants will attract shoppers from the local area, across London and international visitors to the city and its opening will mark the completion of Phase 1 of Quintain's 8 million sq ft regeneration scheme around the National Stadium.

The hotel includes the Icons bar, which is inspired by famous sporting stars, as well as an indoor pool, steam room, sauna, gym and a business centre. It has the capacity to host events for up to 700 guests in its conferencing and events facilities, which include ten meeting rooms and a ballroom.

David Snelgrove from Oaktree Capital Management commented:

"Wembley is an iconic destination with a storied history and should continue to benefit from significant investment from Quintain and others. We are excited to be partnering with Quintain and to be part of Wembley's on-going regeneration and status as an attractive destination for conferences, events and leisure activities."

Max James, Chief Executive of Quintain, said:

"We are delighted to introduce Oaktree as a further stakeholder in the regeneration of Wembley. This transaction clearly reflects the scheme's significant investment potential.

"The sale of a 50% interest forms an important part of our strategy to reduce net debt to below £400m whilst enabling Quintain to participate further in the potential upside from the Hilton's maturing business profile. The opening of the London Designer Outlet later this year, a revitalised Wembley Arena and Wembley's emerging position as a new, dynamic retail and leisure destination within London will all contribute to the success of the new hotel."

For further information, please contact:

Quintain                                                       RLM Finsbury

Max James or Richard Stearn                            Jenny Davey or Ed Lane Fox

Tel:    [phone]                                       Tel:    [phone]

Forward looking statements

This announcement is for information purposes only and contains certain forward-looking statements which, by their nature, involve risk and uncertainty because they relate to or depend upon future events and circumstances.

There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by these forward looking statements, including a number of factors outside Quintain's control. All forward-looking statements are based upon information known to Quintain on the date of this announcement and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. Quintain gives no undertaking to update forward-looking statements whether as a result of new information, future events or otherwise. Information contained in this announcement relating to the Company should not be relied upon as an indicator of future performance.

 

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