LONDON (ShareCast) - Shopping centre developer Capital & Regional (C&R) has exchanged contracts for the sale of its 50/50 German joint-venture with Ares Management to clients and funds under management of Rockspring Property Investment Managers.
C&R said the sale would represent the last major step in its drive to re-focus its business on its portfolio of dominant UK shopping centres and comes ahead of the company's conversion to a real estate investment trust (REIT) on 31 December.
The proposed transaction, based on an adjusted net asset value calculation, effectively values the equity of the JV at about €105m, or about €52.5m for the company's 50% share. It is subject to conditions including German government regulatory approval.
The German joint-venture consists of 23 properties held in five separate portfolios largely anchored by national food retailers and comprising over 200 units.
As part of the transaction, C&R will retain for up to five years a small minority stake in each of the German portfolios expected to be valued at about €2m in total. After transaction costs and the positive impact of currency hedging arrangements, the company expects the net cash proceeds to be about £43m.
For the six months to 30 June 2014 the Group's share of recurring pre-tax profit of the German joint venture was £3.1m.
Chief executive Hugh Scott-Barrett said: "2014 has been a year in which we have undertaken a number of major initiatives that have allowed us to significantly transform C&R.
"Having restructured the company's debt, undertaken a number of non-core divestments, acquired full ownership of the Mall Fund and received shareholder approval for a REIT conversion on 31 December, the proposed disposal of our German joint venture represents the last major step in repositioning the company's focus on its core portfolio of dominant UK community shopping centres."
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