Intu is to sell a 50% stake in its Derby shopping centre to Cale Street Investments, an investment firm backed by the Kuwait Investment Office, London, for £186.3m.
Cale Street will pay cash for a 50% stake in the mall, which, according to intu, “values their share of the property at £186.3m, before taking account of senior debt finance and customary working capital adjustments”.
It added that the structured equity transaction includes a prioritisation waterfall for distributions to the joint venture partners.
Intu will continue to manage the mall on behalf of the new joint venture once the transaction, which is subject to the completion of senior debt finance and certain other completion conditions, is finalised.
Intu said it would use the net proceeds of the transaction to repay debt.
See also: Under pressure intu in £750m Trafford Centre debt hunt
The 1.3m sq ft East Midlands mall was valued at £372.5m on 31 December 2018, representing a net initial yield of 6.6%.
Intu Derby comprises more than 200 units and includes retailers such as M&S, Debenhams, Next, H&M, Sainsbury’s, Zara, Hollywood Bowl and Showcase Cinema de Lux, which provided a net rental income of £25.2m for the year ended 31 December 2018.
Matthew Roberts, chief executive designate at intu, said: “In what is a challenging investment market, this innovative transaction, which is in line with the December 2018 valuation, shows intu is delivering on its strategy of reducing loan to value through disposals and part-disposals.
“On a pro forma basis, we expect the impact of this transaction to reduce our loan to value by around 1%.”
Knight Frank advised Cale Street on the acquisition.
To send feedback, e-mail louise.dransfield@egi.co.uk or tweet @DransfieldL or @estatesgazette
