Disposal of 75% Interest of B
For immediate release 4 June 2009
Disposal of 75% Interest in Bishops Square, London E1
Hammerson plc has exchanged contracts and completed the sale of a 75% interest in Bishops Square, Spitalfields, London E1. Bishops Square will now be held in a 75:25 joint venture between the Oman Investment Fund (OIF), an investment arm of the Government of Oman, and Hammerson.
Bishops Square was developed by Hammerson in partnership with the Corporation of London and completed in 2005. The 71,900m2 of office space is let to international law firm, Allen & Overy LLP, under leases expiring in 2030, with tenant's break options in 2027. There is a further 4,600m2 of retail space let to a range of tenants. Net passing rents at 31 December 2008 were £34.5 million per annum.
The consideration for the property is £445 million and the joint venture assumes the secured debt facility. The book value of the property at 31 December 2008 was £486 million. The transaction will reduce Hammerson's net debt by £386 million and its adjusted net assets per share by 6 pence. Further details are provided in the notes below.
John Richards, Chief Executive of Hammerson, said:
'We are delighted to be partnering the Oman Investment Fund in this new joint venture. This transaction has allowed us to further strengthen the Group's balance sheet whilst retaining a significant stake in one of London's best office buildings.
Our recently announced property disposals together with the earlier rights issue will reduce the group's net debt by around £1.2 billion. Following completion of these asset sales, net debt will be approximately £2.1 billion. This gives a pro-forma loan-to-value ratio of less than 40%, based on the portfolio valuation at 31 December 2008, ensuring we are well placed for the future.'
Hassan Al Nabhani, Chief Executive Officer of OIF said:
'We are equally pleased to be in partnership with Hammerson and to own a stake in one of the landmark buildings in the London office property market.'
Further information:
|
John Richards, Chief Executive |
Tel: 020 7887 1000 |
||
|
Morgan Bone, Director of Corporate Communications |
Tel: 020 7887 1009 morgan.bone@hammerson.com |
NOTES
1. Hammerson plc is a FTSE-100 Real Estate Investment Trust which operates principally in the retail sector in the UK and France. At 31 December 2008, its £6.5 billion portfolio provided 1.4 million m² of retail space, including 15 major shopping centres and 19 retail parks, and 255,000m² of offices.
2. Hammerson will account for its 25% interest in the joint venture company as an associate at its share of the joint venture's net asset value.
3. Following completion of the transaction, Hammerson will retain responsibility for asset management and receive a fee of £300,000 per annum. Hammerson may also be entitled to additional consideration depending on the future financial performance of the property.
4. On completion, the joint venture company will have an existing bank loan of
£360 million secured on the property, provided by a syndicate of banks led by Bayern LB, and maturing in April 2013. Hammerson will also provide a mezzanine loan of £21 million. Hammerson's loan is secured by a second charge on the property, bears interest at 6.3% and is repayable in April 2013.
5. Transaction costs are expected to be circa £5 million. After taking account of costs and interest rate swaps, the transaction will result in a loss on disposal for Hammerson of
£23 million. The reduction in Hammerson's adjusted net asset value on an EPRA basis, which excludes the fair value of interest rate swaps, will be £45 million, or 6 pence per share.
6. Hammerson was advised by Lazard, CBRE and Clifford Chance. OIF was advised by the London offices of Jones Lang LaSalle and DLA Piper.
7. Oman Investment Fund is an investment arm of the Government of Oman. The Fund's objective is to invest globally in a diversified portfolio including private equity and real estate assets.
This information is provided by RNS
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