Partnership and disposals
Great Portland Estates PLC
08 November 2004
8 November 2004
Great Portland forms limited partnership with Liverpool Victoria Friendly
Society and completes exit from regions
Great Portland Estates plc ('GPE') and Liverpool Victoria Friendly Society
('LVFS') have formed the Great Victoria Limited Partnership ('The Partnership')
to own four central London buildings including the Mount Royal block on Oxford
Street, W1 acquired for £80 million. The partnership will have assets at the
outset with an approximate value of £122.7 million, with each partner
contributing £33.5 million of equity, financed through cash and property
contributions.
The properties to be contributed by GPE are 81 & 82 Dean Street, London W1,
comprising 32,800 sq ft of offices and let to TBWA Group UK Ltd, a subsidiary of
Omnicom. They produce a current annual net income of £1.4 million.
LVFS will contribute 40/48 Broadway & 1/11 Carteret Street, London SW1 and
Verulam Gardens, 70 Grays Inn Road, London WC1. Broadway and Carteret Street
comprises 60,000 sq ft of offices occupied by Liberty International plc as their
headquarters and the Youth Justice Board. Verulam Gardens is a 34,000 sq ft
office building let to patent agents Boult Wade Tennant and the first Secretary
of State. The current combined annual net income of the LVFS properties is £1.8
million.
The Partnership has agreed to acquire, subject to superior landlords' consents,
eight separate leasehold interests in Mount Royal, 508/540 Oxford Street, London
W1 from Quintain Estates and Development PLC for £80 million; they comprise
88,500 sq ft of retail space producing a current annual net income of £3.7
million with a current rental value of over £7.0 million.
The Partnership will finance the purchase of Mount Royal with cash from the
partners and non-recourse debt of £61.4 million from Barclays Bank Plc. GPE will
be retained by the Partnership to carry out asset , investment and development
management services.
GPE also announces the sale of its two remaining properties outside London. The
disposals complete the Group's strategic plan to concentrate its activities
exclusively in the capital.
In separate transactions, it has sold Nicholson's House, Nicholson's Walk,
Maidenhead to Cube Investments, and 661 London Road, Hounslow to Berkeley Homes
plc. Nicholson's House is a leasehold office building of 27,200 sq ft with a
weighted average unexpired income stream of under three years, whilst 661 London
Road is a vacant 59,000 sq ft office building which will be redeveloped by
Berkeley Homes in to residential units. GPE has retained a profit share in its
redevelopment, the value of which is based upon future residential sales
receipts. The consideration received from these sales amounts to £10.9 million
and the net income foregone is £0.6 million per annum.
Toby Courtauld, Chief Executive of GPE, said: 'The formation of the Great
Victoria Limited Partnership to exploit these first class assets is very
exciting and provides another example of GPE buying into opportunities at
sensible prices with real angles for value creation. Other recent acquisitions
include a major site at Tooley Street, opposite the new More London development
on the Southbank, and income producing properties with refurbishment or
redevelopment angles at Sackville Street in Mayfair and Broadwick Street in the
heart of Soho. At Mount Royal, we have the opportunity to play a key role in the
resurgence of the western end of Oxford Street, an area suffering from a lack of
investment in recent years and which, we believe, has good potential.
We are very pleased to have teamed up with Liverpool Victoria and we look
forward to working with them and our neighbours to improve this part of the
heart of London'.
Ken Lawrence, a Director of Liverpool Victoria Asset Management, said 'we are
delighted with the formation of this partnership with GPE which gives us access
to, and co-investment with, a leader in the specialist central London market.'
Contacts:
Great Portland Estates plc
Toby Courtauld Chief Executive 020 7612 1442
Robert Noel Property Director 020 7612 1443
Finsbury
Edward Orlebar 020 7251 3801
Liverpool Victoria Asset Management
Ken Lawrence Director 020 7929 9717
Tim Hayne Head of Property Investment 020 7929 9719
This information is provided by RNS
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