£100 Equity Increase and Acqu
18 November 2010
LONDON & STAMFORD PROPERTY PLC
("London & Stamford" or "LSP")
£100m increase in equity funding by existing Middle Eastern partners
and acquisition of prime distribution portfolio for £123 million
London & Stamford Property Plc (LSE: LSP.L) announces that an agreement has been reached with its existing Joint Venture partners in the Middle East, Green Park Investments, under which they will increase the available equity funding to the Joint Venture by £100 million. Following the purchase by the Joint Venture of a 50% share in Meadowhall in 2009, some £80 million of the initial commitment remained to be invested. That amount will now increase to £180 million.
London & Stamford also announces the £123 million acquisition of a prime distribution portfolio from a property fund company advised by AEW Europe and Tristan Capital Partners.
The portfolio comprises five distribution units totalling 986,268 sq ft let to five tenants: The Metropolitan Police Authority, Royal Mail Group Limited, Kuehne & Nagel, Ceva Freight (UK) Ltd and Pearson Plc. The weighted average unexpired lease term is 12 years. The annual rent roll is £8.7 million of which 67% is from four buildings located within the M25 in west London, close to Heathrow, the remaining income derives from a unit located in Rugby, within the Midland's 'Golden Triangle' for distribution assets.
LSP has committed £64 million of cash (inclusive of costs) to complete the acquisition.
On 5 November, London & Stamford announced the acquisition of the Lojix distribution portfolio which together with the new purchase announced today will make an aggregate purchase of £205 million of such property with current gearing of £105 million, requiring £100 million of equity.
London & Stamford and Green Park Investments are pleased to announce that they have secured respective approvals for this combined distribution portfolio to be taken into the Joint Venture on a 50:50 basis.
At the present time the cash on cash yield on the combined portfolio is 9.27% It is the intention of the parties to refinance this combined portfolio in the Joint Venture and it is estimated that when that is concluded, which should be early in 2011, the cash on cash yield is expected to be in excess of 11% and the amount of equity invested by London & Stamford will reduce to £42 million leaving firepower of circa £1 billion, inclusive of the remaining commitment of our Joint Venture Partners of circa £140 million.
Raymond Mould Executive Chairman of London & Stamford, said:
"We are delighted to announce this increased commitment by Green Park to our Joint Venture. The combination of today's excellent acquisition with our acquisition of the Lojix portfolio has provided the opportunity to bring a high quality portfolio within the Joint Venture, which when refinanced with conservative leverage will give us attractive cash on equity returns.
London & Stamford now has exposure to three core distribution locations: the Midlands, London and the South East and Heathrow. The combined high quality portfolio comprises 29 buildings totalling 6.25 million square feet delivering a well secured distributable income stream from a strong tenant mix with long lease lengths. Our focus in this sector will now be concentrated on driving further value through continuing to identify and effectively implement asset management initiatives within the portfolio."
For further information contact:
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London & Stamford Property Plc Raymond Mould Patrick Vaughan
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Tel: +44 (0)20 7484 9000 |
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Kreab Gavin Anderson Richard Constant / James Benjamin / Anthony Hughes
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Tel: +44 (0)20 7074 1800 |
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Notes to editors:
London & Stamford Property plc was set up to exploit opportunities that it anticipated in the UK property cycle and is a group UK-REIT. The Company has a highly experienced management team and invests in commercial property, including office, retail and industrial real estate assets, principally in the UK, and has a property portfolio which now comprises 24 investments, all of which are located in the UK.
The Company is traded on the London Stock Exchange's Main Market (LSP.L) and is authorised by the FSA to carry out certain regulated activities.
Further information on the Company is available from the Company's website: www.londonandstamford.com
This information is provided by RNS
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