Friday, November 23, 2007

Royal Bank of Scotland Awards $1.7 Billion Sale Leaseback of 63 Properties

Financial Times - November 23 2007

Royal Bank of Scotland has found a buyer for an £800m ($1.7bn, €1.1bn) portfolio of 63 properties. The price is about 10 per cent lower than originally expected but indicates that real estate deals are possible in spite of the credit squeeze. The preferred bidder on the RBS portfolio is understood to be Prudential, the insurer, which has joined forces with William Pears, a private family-run investment group.

The sale and leaseback agreement comes after several other property deals have been abandoned in recent weeks, including the attempted sale of Meadowhall Shopping Centre in Sheffield by British Land. But the price of the assets has been cut to £800m from an initial asking price closer to £900m in a sign of the weakening market.

William Pears and Prudential beat competition in the final round from Nick Leslau, the private property entrepreneur, working with HBOS. Other interested bidders had included Moorfield and Delancey, both private companies.

The 63 properties cover 2.1m sq ft and produce about £47m of annual rent, making a yield of 5.5 per cent. They include the Strand head office of Coutts, one of RBS’s private banking operations, and other branches including 1 Princes Street in Edinburgh and 28 Cavendish Square in London’s West End. RBS was advised by Cushman & Wakefield. The Scottish bank had put the portfolio up for sale to help raise money for the joint takeover of ABN Amro, the Dutch bank. Sphere: Related Content

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