Sunday, January 24, 2010

Piggly Wiggly Enters $28 Million Sale Leaseback of Distribution Center in SC

The Post and Courier - January 23, 2010

Piggly Wiggly Carolina Co., which operates 110 grocery stores throughout the Southeast, has sold its main, 615,650-square-foot storage warehouse near Summerville to a Charleston real estate investment company, which is leasing the space back to the supermarket chain.

The $28 million sale and lease-back deal will allow the company to focus on its core business of selling groceries and tap valuable cash to invest, said David Schools, Piggly Wiggly Carolina's chief executive officer.

"It'll help us manage our debt better and put more money into our current locations," he said, noting that a handful of stores are due for remodeling.

In 2008 the grocer made a similar deal with its truck fleet by selling it to Miami-based Ryder Systems and leasing the vehicles back to minimize risk and cut costs.

Piggly Wiggly Carolina sold its main distribution center to Charleston-based J.L. Woode, which already manages two other facilities for the supermarket operator -- its corporate headquarters building on Croghan Spur Road in West Ashley and a 428,887-square-foot warehouse in North Charleston.

While one reason for the sale was to generate cash, Schools said the deal isn't a sign of financial hardship.

"It's just a sign of us taking an asset and positioning it to best help us in the future," he said.

The move won't affect payroll at the company, Schools added. He said Piggly Wiggly employees will continue to maintain the facility under the long-term lease agreement.

The company built the distribution center in the Jedburg area along Interstate 26 in 1999. Sphere: Related Content

Monday, January 18, 2010

Spanish Real Estate Lawyers Benefit From Flood of Sale Leaseback Deals

Iberian Lawyer

While the majority of international real estate investors continue to reject the Spanish property market after its dramatic implosion, some at least have been attracted by a steady stream of sale-andleaseback offerings – work that many RE lawyers admit to being grateful for in an otherwise dead market.

One of the biggest European real estate deals this year involved Spain’s number two bank, BBVA, which sold a portfolio of 948 bank branches and landmark buildings throughout Spain to a consortium formed by Banco March and international private equity funds RREEF Alternative Investments, Area Property Partners and Europa Capital, for €1.2bn. BBVA was advised by Clifford Chance, the buyers by Freshfields and the banks syndicating the buyers’ loan by Linklaters and Uría Menéndez. BBVA is expected to release the remaining 20% of its property assets shortly.

On a smaller scale, Uría Menéndez advised Caixa Galicia on the sale and lease-back of 41 properties. The purchasers were advised by Baker & McKenzie.

Encouraged by this and other deals, Spain’s secondranked savings bank, Caja Madrid, issued a 25-year sale-and-leaseback prospectus for an initial lot of 58 branches. If the operation reaches its target price of €70m Caja Madrid will release more of its 2,183- branch network. Banco Sabadell and Banesto, which had originally planned to release their entire portfolios in one operation, will also now drip feed the market.

These deals, and last year’s equally epic €4bn sale of virtually all of Santander’s property portfolio, have persuaded Spanish corporates that they too can realise locked-up value by following the same process. A Jones Lang Lasalle study reveals that 32% by volume of real estate investment deals made in Barcelona this year have been related to sale-andleaseback deals.

Uría Menéndez advised travel specialist Grupo Marsans in the sale and lease of its Campo de las Naciones (Madrid) headquarters. The purchaser, German investment fund URE, was advised by Gómez-Acebo & Pombo. Utilities, transport and infrastructures company Acciona has now put up for sale-and-leaseback two of its Alcobendas, Madrid headquarter buildings, hoping to book €60m to its accounts. Swiss insurance giant Zurich has put its Barcelona headquarters on the block with the expectation of receiving at least €50m. Construction and infrastructure powerhouse Ferrovial is looking for a similar deal for its Madrid headquarters. It may earn €40m for the only building it owns, the rest that it uses are leased.

This move by the corporates will please the smaller law firms, which do not have big teams capable of handling hundreds of property deals simultaneously. In addition, there is less financial risk if the operation does not prosper with success fees now the order of the day.

RE lawyers are also however expecting a boost from the enactment of the new legal framework for investment companies to set up Real Estate Investment Trusts (REITs – SOCIMIs in Spanish), which details the compliance requirements to benefit from the beneficial corporate tax regime (18% instead of 30%) as well as exemption from taxation on dividend distributions.

The investment companies must have a minimum share capital of €15m, follow specific criteria on profit distribution and have an asset portfolio made up of at least 80% of real estate investments that can be rented or acquired with full legal title or through participation in companies. SOCIMIs, the Government hopes, will help stabilise the real estate market, bring new investment, and encourage housing rentals over the coming years. Sphere: Related Content

Whitbread Mulls More Hotel Sale Leasebacks

Property Week - January 15, 2010

The success of Whitbread’s first sale and leaseback last month could give the leisure operator the appetite to sell off a second portfolio.

The owner of Premier Inn, Beefeater and Costa Coffee achieved a yield of 5.5.% when it sold five hotels to M&G Investments for £36.7m.

Whitbread property director Mark Anderson says: “The sale price and yield achieved in the last batch was significantly ahead of our expectations. We were aiming for between 6% and 6.5%.”

“The consensus seems to be that capital values will remain strong for the next six months, so it would be a good time to exercise this strategy again. Discussions are ongoing with the board. We are not ruling it out.”

Anderson says the transaction was a “tester” to see what the group could raise for its hotel expansion programme. Whitbread already has a bank loan to fund its hotel development pipeline, but Anderson says sale and leasebacks could be “an alternative source of funding to back up the debt we already have in place with the bank.”

The leisure group chose hotels in Newcastle upon Tyne, Chester, Thurrock, Leicester and Plymouth from its portfolio of 520 freeholds. The sale of the hotels is due to complete this month. Whitbread has agreed to pay a total annual rent roll of £2m.

Anderson says that although the budget market is still growing, the decline in the wider hotel sector means the group is concentrating on building up a land bank of sites, rather than developing new properties.

This slump was reflected in Whitbread’s half-year results, released last November. Although revenues had risen by 3.1%, pretax profits were down by 10% on same period in 2008. Sphere: Related Content

La Caixa Studies Large Sale Leaseback of Spanish Bank Branch Portfolio (English Translation by Google) - January 12, 2010

La Caixa is studying to join the trend of reducing the property risk by selling part of its branch network. The box, which has the largest number of branches in the country, in 5,339 total, Deloitte commissioned the project's viability.

Santander and BBVA led the way, who later joined Banco Pastor and Caixa Catalunya, among others. It tries to sell funds and private banking customers packages with most central offices located in major capitals.

The selling entity obtains resources and liquidity to dispose of property assets, currently penalized in the balance, following into the room rented by the formula called sale & lease back. Normally, reserve an option to repurchase at the end of the lease.

For its part, the buyer may get annual returns of up to 6%. So, La Caixa has commissioned Deloitte financial and accounting report on the possibility to dispose of ownership of parts of its network, the largest in the industry, formed last September by closure of 5339 branches.

A spokesman for the Spanish first box noted that "Deloitte conducted the study in the same way that many others who care not performed at the end." The same sources added that there was no firm decision about it, nor on the number of offices to be included in the packages for sale. The president of La Caixa, Isidro Fainé, rejected this formula from asset sales during the presentation of results for the year 2008 almost a year ago.

In any event, industry sources said that the sale of branches depend on the restructuring of the sector itself, which had closed offices until September 1345, according to the Bank of Spain. International Financial Analyst (AFI), the excess capacity will lead to the elimination of 5,000 offices in over four years.

La Caixa has closed a total of 191 stores in the first nine months of 2009, with the reduction of roughly the same number of ATMs, which stood at a total of 7,923. Sphere: Related Content

ARA and CWT Discussing $1 Billion Sale Leaseback to Form New REIT in Singapore - January 15, 2010

Shares of ARA Asset Management and CWT rose yesterday, when both companies confirmed plans to launch a regional logistics real estate investment trust (Reit) together.

ARA, a real estate fund manager tied to Hong Kong tycoon Li Ka-shing’s Cheung Kong group, saw its shares hit a year high. They gained seven cents or 7.8 per cent to close at 97 cents.

Shares of logistics firm CWT put on two cents or 2.4 per cent to close at 84.5 cents. The counter has hovered above the 80-cent mark since late December.

Investors were probably cheered by news of the Reit venture between ARA and CWT. In a joint release, the firms said that they are ‘in advanced confidential discussions’ and have made a ‘confidential submission’ to the Singapore Exchange (SGX) to set up and list a logistics Reit here. They have also made submissions to other relevant regulatory authorities.

‘It should be noted that no definitive agreements whatsoever have been executed,’ they highlighted. They added that they have not obtained approvals from regulators, including SGX and the Monetary Authority of Singapore.

ARA and CWT were responding to a Reuters article, which said that the two plan to launch a Reit holding properties worth some $1 billion, and DBS would manage the listing. The information came from ‘a source involved in the transactions’.

While both companies confirmed that they were working together on a Reit, they did not verify the other details mentioned in the Reuters report.

In mid-December, CWT gave the market some clues on its plans. It received a query from SGX on an increase in its share price, and revealed that it was in talks to sell and lease back its logistics facilities for the potential creation of a logistics Reit. Sphere: Related Content

Natural Cool Completes $40.3 Million Sale Leaseback of Building in Singapore / - January 13, 2010:

Mainboard-listed Natural Cool Holdings said its unit has told its property at 29 Tai Seng Avenue to Emirates Tarian Capital for S$53 million.

After the deal is done, Natural Cool Investments will leaseback the property for 10 years at an annual average rent of S$4.74 million (an initial yield of 8.95%.)

Natural Cool's CEO, Joseph Ang, said the sale is in line with the firm's efforts to adopt an asset-light strategy.

He added that the firm has not decided what to do with the proceeds of the sale, but may use it to repay bank borrowings, to distribute to shareholders as dividends, or to use as working capital to fund future growth and expansion.

The proposed sale and leaseback deal is subject to shareholder approval, as well as legal and binding due diligence on the property. Sphere: Related Content

State of Arizona Sale Leaseback Raises $735 Million

The Arizona Republic - January 15, 2010

The sale of state buildings to investors was so successful that Arizona lawmakers say they hope to do another round to raise up to an additional $300 million.

The two-day sale that ended Wednesday drew $735.4 million from investors.

"We'll have the money in state coffers by January 26," said Alan Ecker, a spokesman for the state Department of Administration.

The state went to the public bond market to sell certificates of participation in a variety of state buildings, including the recently completed archives building, the tower that houses the Governor's Office and six prison buildings in Florence. The state's death row is not part of the sale.

The investments carry a 4.57 percent interest rate, and maturity dates on the certificates vary from three years to 20 years. Interest is expected to cost the state about $400 million, for a total payback of $1.1 billion.

The state retains control of the 14 buildings, which it will continue to occupy and lease back from investors.

Repayments to the certificate holders will come from semiannual lease payments made from the state's general fund, according to the prospectus the state issued on the sale. If the state were to default on the lease payments, the trustees for the investors would take ownership of the buildings.

House Speaker Kirk Adams, R-Mesa, was buoyed by the results, which matched legislators' projections of how much quick cash they believed the sale could net.

"We have more capacity," Adams said. He is aiming for another sale, this time to bring in $200 million to $300 million. Lawmakers must approve a bill to authorize a further sale.

Rep. John Kavanagh, R-Fountain Hills, said the $735 million arriving in the Treasury later this month will help, but not erase, the state's deficit.

"I don't think that gets us home," he said. Lawmakers had already factored the sale proceeds into their budget calculations, leaving a $1.4 billion deficit.

The sale, akin to a bond sale, allowed investors to pay as little as $5,000 for a certificate of participation.

Retail investors, such as individuals, bought $113.8 million in certificates, or 15.5 percent of the total. Institutional investors accounted for the remaining 84.5 percent, or $621.6 million, according to the Department of Administration.

Other buildings that are now technically owned by investors include the state hospital, state legislative offices and the Veterans Memorial Coliseum.

For a full list of the buildings, go to Sphere: Related Content

Sunday, January 17, 2010

Tesco Enters EUR 36 Million Sale Leaseback of Distribution Center Near Prague

Property Magazine International - January 14, 2010

Deka Immobilien GmbH has acquired the Tesco Distribution Centre in the Prague metropolitan area in the Czech Republic. The logistics property is part of the portfolio held by the open-ended property fund Deka-ImmobilienEuropa. The vendor is Tesco Group PLC, the world’s third largest grocery retailer. The purchase has been implemented as part of a sale and lease-back agreement. Cushman & Wakefield acted on behalf of Tesco Group PLC.

The floor area of around 60,100 sqm is fully let on a long-term basis to Tesco Stores CR, a subsidiary of Tesco Group PLC. The property is situated in an established logistics location with good transport links only 14 km outside Prague. This is the second purchase of a Tesco logistics facility for Deka-ImmobilienEuropa in 2009. In summer, the fund invested some €34 million in a property in the Warsaw metropolitan area, Poland. Sphere: Related Content

Steinwedell Departs AIC Ventures

Austin Business Journal - January 11, 2010

AIC Ventures Managing Partner David Steinwedell, who closed more than $375 million during his tenure, resigned from the company Friday.

The company said the executive left to pursue real estate opportunities. He joined AIC as managing partner of acquisitions in January 2008 and helped grow assets to more than $750 million.

“Steinwedell helped AIC to further entrench AIC’s position as the preeminent provider of middle market sale leaseback capital by driving record acquisition volumes during a difficult economic environment and expanding our presence into new markets that were untapped prior to David’s tenure. We wish him the best in his new endeavors.” AIC President Peter Carlsen said.

AIC employs 40 and has completed transactions worth more than $1 billion in 28 states. Sphere: Related Content

LaPuma Departs WP Carey

Reuters - January 15, 2010

A spokesman for the company, which is preparing to invest a recently-raised $788 million in commercial property, said LaPuma left in late December by "mutual agreement."

LaPuma was not available for comment.

The spokesman said the international unit includes a 15-strong team, which the company was looking to beef up with real estate managers with international acquisition experience.

LaPuma told Reuters in June that W.P. Carey was looking to raise $1 billion to exploit market opportunities globally. He also said the firm was mulling an Islamic fund [ID:nLN065904], but the plan has now been shelved, the spokesman said.

The spokesman said W. P. Carey was looking at options for LaPuma's successor, but the company had not set a deadline for the appointment.

Last month the company completed its first Spanish sale-and-leaseback transaction, buying 13 retail facilities from Spanish supermarket operator Eroski Sociedad Cooperativa [EROSK.UL]." Sphere: Related Content

Thursday, January 07, 2010

Net Lease Specialist Stan Johnson Company Planning Aggressive US Expansion

Stan Johnson Company Web Site - January 4, 2009

Stan Johnson Company, the nation’s premier net lease brokerage firm and Net Lease Authority™, is aggressively looking to expand into key markets across the United States. Following the successes of the company’s first regional office which launched in Houston, Texas in August 2008, Stan Johnson Company will continue to expand with plans of opening four to five more offices in targeted cities across the U.S., including Atlanta, San Francisco, Southern California, New York City & Chicago.

"In preparation for the next real estate cycle, we plan to continue leveraging our expertise while capitalizing on our past successes in order to drive new opportunities and growth for the future," said Stan Johnson, CEO of Stan Johnson Company. "We have talked to several top brokers who have expressed interest in joining our firm."

Leading the regional expansion effort is Daniel Herrold, who was promoted to Executive Managing Director of Business Development in November. Herrold will have responsibility for all business development and recruiting efforts leading the company’s growth plans. Since joining the company in 2003, Herrold has closed nearly 200 single tenant deals valued in excess of $1.6 billion, and as Regional Director, he spear-headed the launch of Stan Johnson Company’s Houston office.

The Houston office has proven to be a success, starting with two senior associates who have closed more than 20 deals totaling approximately $75 million in volume. Leveraging this success, the office has recently expanded the staff to include two additional senior associates and an analyst, with plans to continue to grow in 2010. In an effort to replicate the success of the Houston office, Herrold is now actively looking to hire multiple lead brokers in the targeted cities who have a strong track record of achievement in the single tenant net lease industry.

“We see today as an opportunity to hire more talented brokers, penetrate new markets, and grow our brokerage platform at a faster pace. We believe that our company’s value proposition of focusing exclusively in the net lease industry is stronger than it has ever been, particularly in this sluggish investment sales market,” said Herrold. Sphere: Related Content

Tuesday, January 05, 2010

Quiron Group Closes EUR 55 Million Sale Leaseback of Private Clinic in Spain

PropertyEU - November 30, 2009

Spanish lender Banco Sabadell has acquired the new Quiron Vizcaya private clinic in Bilbao, Northern Spain in a EUR 55 mln sale-and-leaseback agreement with Spanish healthcare operator Quiron Group. The financial institution said the property is earmarked for its Sabadell BS Inmobiliario FII real estate fund.

The Quiron Vizcaya clinic opened its doors last week and is the largest private hospital in the Vizcaya region of Spain. It offers around 19,000 m2 of total space distributed across 155 rooms. The Quiron Group has agreed to continue to occupy and operate the property for the next 20 years.

The Spanish healthcare operator has opened a number of new centres in recent months including new clinics in Madrid and Barcelona while a new centre planned for Valencia is due to open in 2011.

Sabadell's real estate fund has so far invested in a total of 44 properties totalling some 500,000 m2 of commercial space. Clinics and nursing homes represent nearly 20% of the assets in the fund, which delivered annual returns of 3.84% over the past 36 months. Sphere: Related Content

Telereal Trillium To Sell £475 Million Net Leased Property Portfolio

Property Week - January 5, 2010

Telereal Trillium has put a £475m portfolio of assets mainly let to Royal Bank of Scotland up for sale.

It has appointed CB Richard Ellis to sell the Oak portfolio, which comprises 55 assets including the Coutts headquarters on the Strand, Drummonds’ headquarters on Trafalgar Square and Child and Co headquarters on Fleet Street.

More than 45% of the income on the portfolio comes from the London assets. The properties are mainly let to Royal Bank of Scotland until 2037 with annual RPI-rental uplifts.

Graeme Hunter, group property director, Telereal Trillium said “Following the purchase of this portfolio two years ago we have had regular enquiries from many parties interested in acquiring single assets. Since the summer however, the level of interest in a larger portfolio transaction has increased dramatically and as such we see the time as being right to test the market’s appetite for this excellent product.”

Telereal Trillium bought the properties at the end of 2007 in a sale-and-leaseback deal from RBS. Sphere: Related Content

Sunday, January 03, 2010

Savola Enters $80 Million Sale Leaseback of Central Warehouse in Riyadh

Maktoob Business - January 3, 2009

Savola Group Co, Saudi Arabia's largest food company, said Sunday it entered in a sale and leaseback deal with Al Rajhi Capital worth 299 million Saudi riyals ($79.73 million) covering its supermarket chain's main warehouse in Riyadh.

The deal will generate SAR55 million in capital gains for Savola and will be used to cover the lease payments and will not boost its net profit in 2009, the company said in a statement on the Saudi bourse Web site.

The contract, inked Saturday between Savola's subsidiary Al Matoun International for Real Estate Investment Holding Co and Al Rajhi Bank's corporate finance unit, for the sale of supermarket chain Al Azizia Panda United Co's central warehouse in Riyadh, is part of a wider strategy to sell real estate assets to free up cash to invest in core businesses, the company said.

Savola has the right to lease the property for 18 years with a 7 year extension option, the company added.

In July, Savola paid SAR440 million to buy Fawaz Alhokair Group's Geant hypermarket chain. The company said the acquisition will boost its share in Saudi's retail market-estimated at SAR96 billion-from 7% to 8% as part of its strategic target to have a 10% market share within the coming five years.
The expansion was expected to increase sales by 13%. Sphere: Related Content

Saturday, January 02, 2010

CIMB Agrees to $88 Million Sale Leaseback of 65 Bank Branches Across Malaysia

Business Times - December 31, 2009

CIMB Group is selling up to 65 properties that house its banking operations to the Employees Provident Fund (EPF) for RM302.4 million in a related-party sale and leaseback deal.

The group, in an announcement yesterday, said the sale will raise cash for CIMB Bank's working capital, reduce its risk-weighted assets by the book value of the properties and reduce its property risks.

The group is expected to make a gain of RM171 million from the sale.

The properties are currently used to house CIMB Group's banking business operations such as branches and offices.
The sale and leaseback deal will be not be its first.

It sold and leased back its current head office, Bangunan CIMB, and Menara Bumiputra-Commerce.

In late 2007, CIMB group managing director and chief executive officer Datuk Seri Nazir Razak said it was mulling over a third sale and leaseback exercise on some buildings as part of its plan to manage capital more efficiently.

The EPF is a major shareholder in CIMB Group, while Nazir is a member of the pension fund's investment panel. He abstained from voting on the deal. Sphere: Related Content

Wikinvest Wire