mydigtalfc.com - June 23, 2008
Reeling under the US bad loans crisis, Citigroup will raise around $500 million by selling some real estate properties in India, including its headquarters in Bandra Kurla Complex, Mumbai.
The company has appointed Jones Lang LaSalle Meghraj to do a valuation of the headquarters. It is also selling some corporate offices and prime residential properties in Mumbai, Delhi and Chennai. In Mumbai, it has already liquidated about 8 residential properties in the last one year. Recently, it sold a property here to a Bollywood actor for a whopping Rs 30 crore.
Industry officials said the company plans to sell the BKC headquarters and lease it back. When contacted by Financial Chronicle, chairman and country head of Jones Lang LaSalle Meghraj, Anuj Puri, refused to comment.
While Citibank plans to layoff around 2,000 people globally, its India operations are unlikely to face job cuts. Its investment banking division is growing here, with the firm having appointed Nalin Nayyar, formerly with Lehman Brothers, as a managing director in April.
Citigroup India's headcount has risen to over 22,000 from 21,000 a year earlier. It also hired a new head of mergers and acquisitions, Sameer Nath, who was shifted from Citigroup's US operations.
The company has stopped renting flats to employees. “Since the company plans to sell and lease it back, builders or developers may not be interested. People like high net worth individuals or private equity investors may buy this property,” said an official with IL&FS Property Manage-ment Services, the facilities management arm of IL&FS.
Sphere: Related Content
Wednesday, June 25, 2008
Bank of America Nears $190 Million Sale Leaseback of Chicago Office Tower
Crain's Chicago - June 25, 2008
Bank of America Corp. is close to a deal to sell the former LaSalle Bank Building for roughly $190 million and lease back as much as two-thirds of the 1.2-million-square-foot landmark tower.
The Charlotte, N.C.-based banking giant is in final negotiations to sell the 44-story skyscraper at 135 S. LaSalle St. to New York-based AmTrust Realty Corp., according to sources familiar with the transaction. B of A inherited the Art Deco classic as part of last year’s acquisition of LaSalle Bank’s parent company.
A B of A spokesman confirmed the negotiations with AmTrust but declined to comment on the price. He also declined to comment on how much space the bank would lease, except to say that no jobs would be affected by the deal.
The bank currently occupies about 800,000 square feet in the building, according to real estate research firm CoStar Group Inc.
As a result of the deal, B of A will reduce its occupancy expenses and cut costs by getting out of the property management business for outside tenants, the spokesman said in an e-mail. “This transaction also would free up capital and allow us to continue to reinvest in our businesses,” he said in the e-mail.
B of A has offered to provide a loan to the winning bidder, sources say, a key boost to the deal at a time when many potential transactions are not moving ahead because of the difficulty of obtaining financing.
The deal could close as soon as next month. An executive with Chicago-based real estate firm Jones Lang LaSalle Inc., which is advising B of A in the sale, declined to comment.
The transaction is believed to be the second Chicago acquisition for AmTrust Realty, a low-profile real estate investment firm owned by brothers Michael and George Karfunkel.
In April 2004, Amtrust acquired 33 W. Monroe St., which once housed the headquarters of defunct accounting firm Arthur Andersen LLP. Since then, Amtrust has leased up the 879,000-square-foot building. The vacancy rate has dropped to 10.1%, compared to 67.1% when purchase was made, according to CoStar. Sphere: Related Content
Bank of America Corp. is close to a deal to sell the former LaSalle Bank Building for roughly $190 million and lease back as much as two-thirds of the 1.2-million-square-foot landmark tower.
The Charlotte, N.C.-based banking giant is in final negotiations to sell the 44-story skyscraper at 135 S. LaSalle St. to New York-based AmTrust Realty Corp., according to sources familiar with the transaction. B of A inherited the Art Deco classic as part of last year’s acquisition of LaSalle Bank’s parent company.
A B of A spokesman confirmed the negotiations with AmTrust but declined to comment on the price. He also declined to comment on how much space the bank would lease, except to say that no jobs would be affected by the deal.
The bank currently occupies about 800,000 square feet in the building, according to real estate research firm CoStar Group Inc.
As a result of the deal, B of A will reduce its occupancy expenses and cut costs by getting out of the property management business for outside tenants, the spokesman said in an e-mail. “This transaction also would free up capital and allow us to continue to reinvest in our businesses,” he said in the e-mail.
B of A has offered to provide a loan to the winning bidder, sources say, a key boost to the deal at a time when many potential transactions are not moving ahead because of the difficulty of obtaining financing.
The deal could close as soon as next month. An executive with Chicago-based real estate firm Jones Lang LaSalle Inc., which is advising B of A in the sale, declined to comment.
The transaction is believed to be the second Chicago acquisition for AmTrust Realty, a low-profile real estate investment firm owned by brothers Michael and George Karfunkel.
In April 2004, Amtrust acquired 33 W. Monroe St., which once housed the headquarters of defunct accounting firm Arthur Andersen LLP. Since then, Amtrust has leased up the 879,000-square-foot building. The vacancy rate has dropped to 10.1%, compared to 67.1% when purchase was made, according to CoStar. Sphere: Related Content
Friday, June 20, 2008
MAXIMA Completes EUR 46.6 Million Sale Leaseback of Supermarket Portfolio in Lithuania
PR Inside - June 18, 2008
Re&Solution has acted as a sole advisor of the largest retail chain of food products and manufactured goods in the Baltic States MAXIMA in EUR 46.6 million supermarket portfolio sale and leaseback transaction
The Norwegian investment banking company VERDISPAR, representing its investors through the company VERDISPAR Retail Properties II, has acquired a 26,500 sq. m (285,300 sq. ft.) real estate portfolio from MAXIMA. Verdispar paid LTL 161 million (EUR 46.6 million) for nine supermarkets (MAXIMA X and MAXIMA XX) situated in the largest cities of Lithuania: Vilnius, Kaunas, Klaipeda, Alytus and Siauliai, as well as in Ukmerge and Plunge. MAXIMA will continue to do business in these supermarkets as the chain has signed long-term leaseback contracts with VERDISPAR. The transaction will be formally completed after it is approved by the Competition Council of the Republic of Lithuania.
Mr. Ricardas Cepas, Re&Solution partner said: 'time to buy commercial property in our countries is particularly attractive now. Increased costs of borrowing and significantly tightened credit policy have induced developers to start considering alternative financing opportunities, for example, forward funding or disposing of currently possessed assets. Moreover, quality of investment products has improved substantially compared to for example 2006/2007. The largest shopping centre developers and retail chains have started sales of their assets. The biggest shopping centre, one of the largest logistic hubs is on sale presently; the strongest retail chains consider JV and sale and lease back opportunities; the strongest developers search for development and financial partners. MAXIMA sale and leaseback transaction is an obvious proof of quality of available opportunities, thus we expect that the deal will encourage institutional investors to explore the region and investigate the best investment possibilities ever'.
The transaction was partly financed by SEB and Nordea banks. Sphere: Related Content
Re&Solution has acted as a sole advisor of the largest retail chain of food products and manufactured goods in the Baltic States MAXIMA in EUR 46.6 million supermarket portfolio sale and leaseback transaction
The Norwegian investment banking company VERDISPAR, representing its investors through the company VERDISPAR Retail Properties II, has acquired a 26,500 sq. m (285,300 sq. ft.) real estate portfolio from MAXIMA. Verdispar paid LTL 161 million (EUR 46.6 million) for nine supermarkets (MAXIMA X and MAXIMA XX) situated in the largest cities of Lithuania: Vilnius, Kaunas, Klaipeda, Alytus and Siauliai, as well as in Ukmerge and Plunge. MAXIMA will continue to do business in these supermarkets as the chain has signed long-term leaseback contracts with VERDISPAR. The transaction will be formally completed after it is approved by the Competition Council of the Republic of Lithuania.
Mr. Ricardas Cepas, Re&Solution partner said: 'time to buy commercial property in our countries is particularly attractive now. Increased costs of borrowing and significantly tightened credit policy have induced developers to start considering alternative financing opportunities, for example, forward funding or disposing of currently possessed assets. Moreover, quality of investment products has improved substantially compared to for example 2006/2007. The largest shopping centre developers and retail chains have started sales of their assets. The biggest shopping centre, one of the largest logistic hubs is on sale presently; the strongest retail chains consider JV and sale and lease back opportunities; the strongest developers search for development and financial partners. MAXIMA sale and leaseback transaction is an obvious proof of quality of available opportunities, thus we expect that the deal will encourage institutional investors to explore the region and investigate the best investment possibilities ever'.
The transaction was partly financed by SEB and Nordea banks. Sphere: Related Content
Tuesday, June 17, 2008
Imo Planning £60 million Sale Leaseback of Car Wash Properties Across Europe
Telegraph - June 15, 2008
Carlyle Group is heading for a showdown with debt investors of Imo, the world's biggest car wash company, as the private equity house revealed plans to dipose of the group's property assets to raise more money.
Carlyle, which is nick-named the ex-presidents' club for employing political heavyweights such as James Baker and John Major, has in recent weeks asked the debt investors of Imo to approve of a sale and lease back of car wash sites that would raise £60m. The debt investors are concerned about the proposals since the property is the main collateral for their investment.
One investor said: "This seems to be an effort on the part of Carlyle to use our security rather than put in more equity themselves. It is not satisfactory." Debt holders have been asked to approve the scheme in the next few weeks.
Carlyle wants to raise the additional money to fund an expansion plan of new car wash sites across Europe. The car wash company had a tough year last year after poor weather affected trading. Experts say that people are more likely to get their cars washed when the weather changes. Last year there were long periods of constant rain or sun.
This year the group says business has been strong so far. Even so Carlyle wants to build more sites to ensure a wider catchment area but needs additional funding.
Imo currently owns 900 car wash sites in 14 countries, that wash over 34 million vehicles each year. In the UK, Imo has 300 sites trading as Arc Clean Car Centres. The next biggest presence is in Germany where is has 335, with the remaining sites spread across 12 other countries.
Carlyle bought the group in 1996 from JP Morgan Partners. Previously it was owned by Bridgepoint Capital, which had led a management buy-in in 1998. The company was originally founded in Germany in 1965 and expanded to include sites in the UK, and throughout Europe. Sphere: Related Content
Carlyle Group is heading for a showdown with debt investors of Imo, the world's biggest car wash company, as the private equity house revealed plans to dipose of the group's property assets to raise more money.
Carlyle, which is nick-named the ex-presidents' club for employing political heavyweights such as James Baker and John Major, has in recent weeks asked the debt investors of Imo to approve of a sale and lease back of car wash sites that would raise £60m. The debt investors are concerned about the proposals since the property is the main collateral for their investment.
One investor said: "This seems to be an effort on the part of Carlyle to use our security rather than put in more equity themselves. It is not satisfactory." Debt holders have been asked to approve the scheme in the next few weeks.
Carlyle wants to raise the additional money to fund an expansion plan of new car wash sites across Europe. The car wash company had a tough year last year after poor weather affected trading. Experts say that people are more likely to get their cars washed when the weather changes. Last year there were long periods of constant rain or sun.
This year the group says business has been strong so far. Even so Carlyle wants to build more sites to ensure a wider catchment area but needs additional funding.
Imo currently owns 900 car wash sites in 14 countries, that wash over 34 million vehicles each year. In the UK, Imo has 300 sites trading as Arc Clean Car Centres. The next biggest presence is in Germany where is has 335, with the remaining sites spread across 12 other countries.
Carlyle bought the group in 1996 from JP Morgan Partners. Previously it was owned by Bridgepoint Capital, which had led a management buy-in in 1998. The company was originally founded in Germany in 1965 and expanded to include sites in the UK, and throughout Europe. Sphere: Related Content
Saturday, June 14, 2008
Rexel Completes EUR 62 Million Sale Leaseback of Six Warehouse Distribution Properties in France
Rexel Web Site - June 12, 2008
Rexel France has concluded a sale-and-leaseback agreement with Gecina Group for seven logistics platforms located in specialized logistics hubs on major trunk roads. The transaction is part of the Rexel Group’s strategy of leasing its commercial and logistics sites so as to be able to continuously adapt its real estate portfolio to market evolutions.
This transaction reduces Rexel's debt by 62 million euros, of which 38 million euros were already reflected in the Q1 2008 consolidated balance sheet. The remaining 24 million euros will be accounted for in the Q2 2008 consolidated balance sheet.
These seven logistics platforms, which represent a constructed area of nearly 125,000 m², are located in Nancy (Champigneulles), Lyon (Saint-Vulbas), Marseille (Miramas), Toulouse (Tournefeuille), Nantes (Saint-Herblain), Rouen (Grand-Quevilly) and Orléans (Meung-sur-Loire).
Six of these platforms were leased back by Rexel France under a commercial lease, whilethe Saint-Vulbas platform will be transferred to a new, larger building in the same Plaine del’Ain logistics hub.
Rexel France was advised in this transaction by the property expert Schneider
International and the Field Fisher Waterhouse law firm. Sphere: Related Content
Rexel France has concluded a sale-and-leaseback agreement with Gecina Group for seven logistics platforms located in specialized logistics hubs on major trunk roads. The transaction is part of the Rexel Group’s strategy of leasing its commercial and logistics sites so as to be able to continuously adapt its real estate portfolio to market evolutions.
This transaction reduces Rexel's debt by 62 million euros, of which 38 million euros were already reflected in the Q1 2008 consolidated balance sheet. The remaining 24 million euros will be accounted for in the Q2 2008 consolidated balance sheet.
These seven logistics platforms, which represent a constructed area of nearly 125,000 m², are located in Nancy (Champigneulles), Lyon (Saint-Vulbas), Marseille (Miramas), Toulouse (Tournefeuille), Nantes (Saint-Herblain), Rouen (Grand-Quevilly) and Orléans (Meung-sur-Loire).
Six of these platforms were leased back by Rexel France under a commercial lease, whilethe Saint-Vulbas platform will be transferred to a new, larger building in the same Plaine del’Ain logistics hub.
Rexel France was advised in this transaction by the property expert Schneider
International and the Field Fisher Waterhouse law firm. Sphere: Related Content
Friday, June 13, 2008
Nomura Agrees to £235 Million Sale Leaseback of London HQ
Property Week - June 13, 2008
Fund managers IVG Asticus and AAIM are under offer to buy Nomura House at 1 St Martin’s Le Grand in the City of London. The two parties have a two-week timetable in which to complete on the 275,000 sq ft building and lease it back to Japanese bank Nomura for around £235m at a yield of around 5%. Drivers Jonas advises Nomura.
All parties declined to comment. Sphere: Related Content
Fund managers IVG Asticus and AAIM are under offer to buy Nomura House at 1 St Martin’s Le Grand in the City of London. The two parties have a two-week timetable in which to complete on the 275,000 sq ft building and lease it back to Japanese bank Nomura for around £235m at a yield of around 5%. Drivers Jonas advises Nomura.
All parties declined to comment. Sphere: Related Content
Thursday, June 12, 2008
Dine Equity Completes $337 Million Sale Leaseback of 181 Appleby's Restaurants
SEC Edgar Web Site - June 19, 2008
On June 13, 2008, Applebee’s Restaurants Kansas LLC, Applebee’s Restaurants Mid-Atlantic LLC, Applebee’s Restaurants North LLC, Applebee’s Restaurants Texas LLC, and Applebee’s Restaurants West LLC (collectively the “Tenant”) entered into a Master Land and Building Lease (the “Master Lease”) with DBAPPLEF, LLC (the “Landlord”) relating to 181 parcels of real property, each of which is improved with a restaurant operating as an Applebee’s Neighborhood Grill and Bar (the “Properties”).
The Master Lease calls for an initial term of twenty years and four five-year options to extend the term which are exercisable by the Tenant or its successors. The initial monthly base rent under the Master Lease will be $2,612,916.66. The initial monthly base rent is subject to a 2% increase on each of the following dates: January 1, 2009; July 1, 2010; July 1, 2011; July 1, 2012; and July 1, 2013. Thereafter, the monthly base rent shall increase by ten percent (10%) of the monthly base rent preceding such increase in base rent on each of July 1, 2018 and July 1, 2023. The Master Lease provides for rent adjustments during each of the option periods as well. Additionally, the tenant under the Master Lease is responsible for additional rent equal to any and all fees, expenses, taxes and other charges of every kind and nature arising in connection with or relating to the Properties.
The Tenant may sublease all or a portion of the Properties, without the Landlord’s consent, provided that certain conditions are met. In addition, the Tenant may assign its interest in the Master Lease with respect to some or all of the Properties, without Landlord’s consent, provided that certain conditions are met and the assignee agrees to enter into a direct lease with the Landlord on a pre-approved form attached to the Master Lease (“Assigned Leases”). Further, if such assignment is to a qualified franchisee meeting certain parameters set forth in the Master Lease, the Tenant shall be released by the Landlord from all obligations with respect to any Assigned Lease.
(Note: Transaction reflects an initial cap rate of approximately 9.3%.) Sphere: Related Content
On June 13, 2008, Applebee’s Restaurants Kansas LLC, Applebee’s Restaurants Mid-Atlantic LLC, Applebee’s Restaurants North LLC, Applebee’s Restaurants Texas LLC, and Applebee’s Restaurants West LLC (collectively the “Tenant”) entered into a Master Land and Building Lease (the “Master Lease”) with DBAPPLEF, LLC (the “Landlord”) relating to 181 parcels of real property, each of which is improved with a restaurant operating as an Applebee’s Neighborhood Grill and Bar (the “Properties”).
The Master Lease calls for an initial term of twenty years and four five-year options to extend the term which are exercisable by the Tenant or its successors. The initial monthly base rent under the Master Lease will be $2,612,916.66. The initial monthly base rent is subject to a 2% increase on each of the following dates: January 1, 2009; July 1, 2010; July 1, 2011; July 1, 2012; and July 1, 2013. Thereafter, the monthly base rent shall increase by ten percent (10%) of the monthly base rent preceding such increase in base rent on each of July 1, 2018 and July 1, 2023. The Master Lease provides for rent adjustments during each of the option periods as well. Additionally, the tenant under the Master Lease is responsible for additional rent equal to any and all fees, expenses, taxes and other charges of every kind and nature arising in connection with or relating to the Properties.
The Tenant may sublease all or a portion of the Properties, without the Landlord’s consent, provided that certain conditions are met. In addition, the Tenant may assign its interest in the Master Lease with respect to some or all of the Properties, without Landlord’s consent, provided that certain conditions are met and the assignee agrees to enter into a direct lease with the Landlord on a pre-approved form attached to the Master Lease (“Assigned Leases”). Further, if such assignment is to a qualified franchisee meeting certain parameters set forth in the Master Lease, the Tenant shall be released by the Landlord from all obligations with respect to any Assigned Lease.
(Note: Transaction reflects an initial cap rate of approximately 9.3%.) Sphere: Related Content
Sunday, June 08, 2008
Volkswagen of America HQ Near Washington, DC Sold
Washington Business Journal - June 6, 2008
A German investment firm has purchased the local headquarters of Volkswagen of America Inc.
Union Investment Real Estate AG, a Hamburg-based investment management company, bought the Tishman Speyer-owned property, known as Woodland Pointe, for an undisclosed amount.
The 184,787-square-foot Class A property has been valued at $100 million. Last fall, Volkswagen signed a 15-year net lease to move its headquarters from Michigan this year. New York-based Tishman Speyer delivered the six-story building in January.
It is expected to be fully occupied by the end of the year, also housing the U.S. headquarters for Audi of America Inc., Audi Financial Services, Volkswagen Credit and other affiliated operations.
Union Investment Real Estate made the purchase due to the property's tenants, the proximity to Dulles International Airport and its visibility along the Dulles Toll Road, said Zeb Bradford, managing director of Metzler, Union Investment's real estate adviser in the U.S. The buyer made the acquisition for UniImmo, its global open-ended real estate fund.
Union Investment Real Estate is planning several other strategic acquisitions in the D.C. area this year, according to Bradford.
Tishman Speyer will continue to manage Woodland Pointe, which is located among 1.7 million square feet of office space in Woodland Park. Roy Bajtel, head of Union Investment's New York City office, represented the company in the negotiations. Drew Flood and Bill Collins of Cassidy Pinkard and Colliers brokered the deal. Sphere: Related Content
A German investment firm has purchased the local headquarters of Volkswagen of America Inc.
Union Investment Real Estate AG, a Hamburg-based investment management company, bought the Tishman Speyer-owned property, known as Woodland Pointe, for an undisclosed amount.
The 184,787-square-foot Class A property has been valued at $100 million. Last fall, Volkswagen signed a 15-year net lease to move its headquarters from Michigan this year. New York-based Tishman Speyer delivered the six-story building in January.
It is expected to be fully occupied by the end of the year, also housing the U.S. headquarters for Audi of America Inc., Audi Financial Services, Volkswagen Credit and other affiliated operations.
Union Investment Real Estate made the purchase due to the property's tenants, the proximity to Dulles International Airport and its visibility along the Dulles Toll Road, said Zeb Bradford, managing director of Metzler, Union Investment's real estate adviser in the U.S. The buyer made the acquisition for UniImmo, its global open-ended real estate fund.
Union Investment Real Estate is planning several other strategic acquisitions in the D.C. area this year, according to Bradford.
Tishman Speyer will continue to manage Woodland Pointe, which is located among 1.7 million square feet of office space in Woodland Park. Roy Bajtel, head of Union Investment's New York City office, represented the company in the negotiations. Drew Flood and Bill Collins of Cassidy Pinkard and Colliers brokered the deal. Sphere: Related Content
Monday, June 02, 2008
Kesko Completes EUR 31 Million Sale Leaseback of HQ & Logistics Property in Finland
Kesko Web Site - May 30, 2008
Kesko Corporation and the Kesko Pension Fund have sold the office and logistics property located at Tikkurilantie 10, Hakkila, Vantaa, to Aberdeen Real Estate Fund Finland in a transaction closed today. The price paid by the fund to Kesko and the Kesko Pension Fund totals about €31 million, of which Kesko´s share is about €10 million. The Kesko Group recognises a gain of about €4 million on the disposal, which will be reported as a non-recurring item in Rautakesko´s profit for the second quarter.
Rautakesko will continue as the principal user of the premises under a long-term lease. Approximately half of the premises have been leased to logistics companies outside Kesko. Premises not used by Kesko are not included in the leaseback system and the buyer will be responsible for them in the future. The total lease area of the property is about 26,000 m².
'The aim of the property disposal is to enhance the use of the Kesko Group capital. The proceeds will be used to strengthen the store network in Finland and abroad,' says Kesko´s Arja Talma, Senior Vice President, CFO. Sphere: Related Content
Kesko Corporation and the Kesko Pension Fund have sold the office and logistics property located at Tikkurilantie 10, Hakkila, Vantaa, to Aberdeen Real Estate Fund Finland in a transaction closed today. The price paid by the fund to Kesko and the Kesko Pension Fund totals about €31 million, of which Kesko´s share is about €10 million. The Kesko Group recognises a gain of about €4 million on the disposal, which will be reported as a non-recurring item in Rautakesko´s profit for the second quarter.
Rautakesko will continue as the principal user of the premises under a long-term lease. Approximately half of the premises have been leased to logistics companies outside Kesko. Premises not used by Kesko are not included in the leaseback system and the buyer will be responsible for them in the future. The total lease area of the property is about 26,000 m².
'The aim of the property disposal is to enhance the use of the Kesko Group capital. The proceeds will be used to strengthen the store network in Finland and abroad,' says Kesko´s Arja Talma, Senior Vice President, CFO. Sphere: Related Content
Brocade Communications Considering Sale Leaseback of $223 Million HQ in San Jose
Cityfeet.com / GlobeSt.com - May 29, 2008
Brocade Communications is spending approximately $223 million on a new headquarters office complex on North First Street. The locally based public company currently keeps its headquarters at 1745 Technology Dr. on a lease that runs out in the middle of 2010.
In an SEC filing this week the provider of datacenter networking solutions says it purchased three unimproved building parcels from MFP/Hunter@First Office Partners LLC for $50.9 million. It retained an affiliate of the seller to develop three office buildings totaling 562,000 sf for an additional $173 million that will be paid in installments over the next 27 months.
The new campus will consist of two seven-story buildings and one four-story building and will have a capacity of approximately 2,200 people, allowing the company to consolidate not only its headquarters at 1745 Technology Dr. but also a building it owns several blocks away at Skyport Plaza. Brocade’s two existing local buildings total about 400,000 sf, a company source tells GlobeSt.com.
With regard to the decision to buy or lease, a company source tells GlobeSt.com that the company evaluated both kinds of transactions and “found that this was very fiscally responsible and met our needs.”
Depending on the market or other circumstances, Brocade may evaluate entering into a sale-leaseback transaction with respect to the property and buildings at a future date, according to SEC documents. As part of the deal the company also obtained a four-year option to take down a fourth parcel totaling four acres for $26 million. Sphere: Related Content
Brocade Communications is spending approximately $223 million on a new headquarters office complex on North First Street. The locally based public company currently keeps its headquarters at 1745 Technology Dr. on a lease that runs out in the middle of 2010.
In an SEC filing this week the provider of datacenter networking solutions says it purchased three unimproved building parcels from MFP/Hunter@First Office Partners LLC for $50.9 million. It retained an affiliate of the seller to develop three office buildings totaling 562,000 sf for an additional $173 million that will be paid in installments over the next 27 months.
The new campus will consist of two seven-story buildings and one four-story building and will have a capacity of approximately 2,200 people, allowing the company to consolidate not only its headquarters at 1745 Technology Dr. but also a building it owns several blocks away at Skyport Plaza. Brocade’s two existing local buildings total about 400,000 sf, a company source tells GlobeSt.com.
With regard to the decision to buy or lease, a company source tells GlobeSt.com that the company evaluated both kinds of transactions and “found that this was very fiscally responsible and met our needs.”
Depending on the market or other circumstances, Brocade may evaluate entering into a sale-leaseback transaction with respect to the property and buildings at a future date, according to SEC documents. As part of the deal the company also obtained a four-year option to take down a fourth parcel totaling four acres for $26 million. Sphere: Related Content
Friday, May 23, 2008
Grupo Prisa Completes EUR 315 Million Sale Leaseback of Three Office Buildings in Spain
Cushman & Wakefield Web Site - May 21, 2008
Drago Real Estate Partners has today announced the signing of an agreement with Prisa to purchase a portfolio of office blocks comprising 3 buildings, two of these located in Madrid and one in Barcelona, belonging to the communications group. The operation will take the form of sale & leaseback and the amount agreed is 315 million Euros.
In late 2007, the Grupo Prisa announced the running of a competition to sell this property portfolio, comprising two buildings in Madrid: one located at Gran Vía 32 (the head office of the Grupo Prisa) and the other on Calle Miguel Yuste (the head office of the daily newspaper El País and other publications) and one building in Barcelona, located at Calle Caspe, 6 – 20 (the head office of Radio Barcelona). The portfolio includes a total of 71,873 m2 and 344 parking spaces, as well as various commercial premises in the building on Gran Vía, with prestigious tenants such as Zara, Mango, H&M and Sfera.
The purchase is to take place through a consortium led by Drago Real Estate Partners. The financing has been provided to Drago by the Banco Santander and the Bayerische Landesbank. The organisation Gómez-Acebo & Pombo has advised Drago Real Estate Partners, Uría y Menéndez has advised Prisa and Clifford Chance has advised the Banco Santander and the Bayerische Landesbank. CB Richard Ellis has advised Prisa in the sales process and Cushman & Wakefield has advised the buyer.
Drago Real Estate Partners is a property investment company which is managed by Mare Nostrum Capital Managers. Sphere: Related Content
Drago Real Estate Partners has today announced the signing of an agreement with Prisa to purchase a portfolio of office blocks comprising 3 buildings, two of these located in Madrid and one in Barcelona, belonging to the communications group. The operation will take the form of sale & leaseback and the amount agreed is 315 million Euros.
In late 2007, the Grupo Prisa announced the running of a competition to sell this property portfolio, comprising two buildings in Madrid: one located at Gran Vía 32 (the head office of the Grupo Prisa) and the other on Calle Miguel Yuste (the head office of the daily newspaper El País and other publications) and one building in Barcelona, located at Calle Caspe, 6 – 20 (the head office of Radio Barcelona). The portfolio includes a total of 71,873 m2 and 344 parking spaces, as well as various commercial premises in the building on Gran Vía, with prestigious tenants such as Zara, Mango, H&M and Sfera.
The purchase is to take place through a consortium led by Drago Real Estate Partners. The financing has been provided to Drago by the Banco Santander and the Bayerische Landesbank. The organisation Gómez-Acebo & Pombo has advised Drago Real Estate Partners, Uría y Menéndez has advised Prisa and Clifford Chance has advised the Banco Santander and the Bayerische Landesbank. CB Richard Ellis has advised Prisa in the sales process and Cushman & Wakefield has advised the buyer.
Drago Real Estate Partners is a property investment company which is managed by Mare Nostrum Capital Managers. Sphere: Related Content
Saturday, May 17, 2008
JC Penney Warehouse Near LA Trades for $36.1 Million
Cityfeet.com / GlobeSt.com - May 15, 2008
A 440,538-sf single-tenant distribution center here has changed hands for $36.1 million, according to industry sources. An undisclosed client of UBS Global Real Estate acquired the 10-year-old development from FR/CAL Beta Northwest, LLC, a joint venture between First Industrial and CalSTRS.
Located near Interstate 5 within Crossroads Commerce Center, the warehouse was built in 1998 and substantially renovated for JC Penney in 2007. The building, 700 D’Arcy Parkway, has 32-foot clear heights and approximately 9,000 sf built out for office use. The 28-acre property includes eight acres of yard area for trailer parking.
JC Penney is currently paying a net rent on the warehouse of $4.23 per sf per year and another $1.19 per sf per year for the trailer parking lot, according to an industry source. The non-cancelable lease runs through 2023 and includes 6% compounding escalations every three years. JC Penney also is paying a 2% annual management fee.
The current net income from the property is $2.27 million. Given the $36.1-million purchase price, the initial cap rate on the transaction is approximately 6.3%.
“We started marketing the property in the September-October timeframe, right after the market had changed, when there was still a tremendous amount of uncertainty,” listing broker Andrew Sandquist of CB Richard Ellis tells GlobeSt.com. “But this is an institutional quality asset in an institutional market that is net leased long term, and investors are still looking for high-quality product and are willing to pay for it. We’re very pleased with the result.”
Sandquist heads up CBRE’s national sale-leaseback group from his office in Chicago. Joining him on the listing were Robert Brennan and Jonathan Wolfe, also from Chicago, and Dave Haggerty of CBRE’s Stockton, CA office, in the disposition of 700 D’Arcy Parkway, Lathrop, CA. Sphere: Related Content
A 440,538-sf single-tenant distribution center here has changed hands for $36.1 million, according to industry sources. An undisclosed client of UBS Global Real Estate acquired the 10-year-old development from FR/CAL Beta Northwest, LLC, a joint venture between First Industrial and CalSTRS.
Located near Interstate 5 within Crossroads Commerce Center, the warehouse was built in 1998 and substantially renovated for JC Penney in 2007. The building, 700 D’Arcy Parkway, has 32-foot clear heights and approximately 9,000 sf built out for office use. The 28-acre property includes eight acres of yard area for trailer parking.
JC Penney is currently paying a net rent on the warehouse of $4.23 per sf per year and another $1.19 per sf per year for the trailer parking lot, according to an industry source. The non-cancelable lease runs through 2023 and includes 6% compounding escalations every three years. JC Penney also is paying a 2% annual management fee.
The current net income from the property is $2.27 million. Given the $36.1-million purchase price, the initial cap rate on the transaction is approximately 6.3%.
“We started marketing the property in the September-October timeframe, right after the market had changed, when there was still a tremendous amount of uncertainty,” listing broker Andrew Sandquist of CB Richard Ellis tells GlobeSt.com. “But this is an institutional quality asset in an institutional market that is net leased long term, and investors are still looking for high-quality product and are willing to pay for it. We’re very pleased with the result.”
Sandquist heads up CBRE’s national sale-leaseback group from his office in Chicago. Joining him on the listing were Robert Brennan and Jonathan Wolfe, also from Chicago, and Dave Haggerty of CBRE’s Stockton, CA office, in the disposition of 700 D’Arcy Parkway, Lathrop, CA. Sphere: Related Content
Friday, May 16, 2008
Vedici Group Enters EUR 73 Million Sale Leaseback of Two Health Care Facilities in France
PropertyEU - May 14, 2008
French property developer Icade has acquired two healthcare assets in Nantes for EUR 73 million from nursing home operator Vedici. The company bought the Polyclinique de l'Atlantique in Saint Herblain, France's leading maternity clinic with total capacity of 269 beds, and the Centre de Soins de Suite de Roz Arvor in Nantes with a capacity of 80 beds. The Vedici Group is leasing back the properties under a 12-year lease. Icade has a development portfolio of public and healthcare assets of about 205,000 m2. Other 158,000 m2 of space have already been brought to the market.
The French builder, which is chaired by Serge Grzybowski, added that it has been hired by Crédit Lyonnais’ bank LCL to construct its headquarters in Villejuif. LCL will rent back the Metropolitan office complex, which consists of 60,000 m2 of space across four buildings. The first asset is scheduled to be delivered in early 2009, while completion for the three others is expected for 2012.
In the beginning of May, Icade and its business partner ING Real Estate signed contracts with IVG to develop three buildings within the new Claude Bernard business park in the 19th arrondissement of Paris. The contracts are for the construction of 40,000 m2 of office space across three properties. Construction work is scheduled to begin in the first quarter of 2009, with completion in 2011. The company posted turnover of EUR 1.5bn in 2007. Sphere: Related Content
French property developer Icade has acquired two healthcare assets in Nantes for EUR 73 million from nursing home operator Vedici. The company bought the Polyclinique de l'Atlantique in Saint Herblain, France's leading maternity clinic with total capacity of 269 beds, and the Centre de Soins de Suite de Roz Arvor in Nantes with a capacity of 80 beds. The Vedici Group is leasing back the properties under a 12-year lease. Icade has a development portfolio of public and healthcare assets of about 205,000 m2. Other 158,000 m2 of space have already been brought to the market.
The French builder, which is chaired by Serge Grzybowski, added that it has been hired by Crédit Lyonnais’ bank LCL to construct its headquarters in Villejuif. LCL will rent back the Metropolitan office complex, which consists of 60,000 m2 of space across four buildings. The first asset is scheduled to be delivered in early 2009, while completion for the three others is expected for 2012.
In the beginning of May, Icade and its business partner ING Real Estate signed contracts with IVG to develop three buildings within the new Claude Bernard business park in the 19th arrondissement of Paris. The contracts are for the construction of 40,000 m2 of office space across three properties. Construction work is scheduled to begin in the first quarter of 2009, with completion in 2011. The company posted turnover of EUR 1.5bn in 2007. Sphere: Related Content
Sunday, May 11, 2008
AT&T Completes $275.2 Million Sale Leaseback of Atlanta Office Campus
Commercial Property News - May 9, 2008
Wells REIT II has acquired a five-building, 1 million-square-foot office campus in the Buckhead submarket of Atlanta, through a long-term sale-leaseback with AT&T. The campus will headquarter AT&T Wireless' operations in the city. The transaction's terms were not disclosed.
The property is located in the Lenox Park office park (pictured) on Lenox Park Boulevard, between Peachtree Road and Interstate 85. AT&T Services Inc. and its subsidiaries will occupy all five of the buildings under new leases running from 10 to 15 years. The buildings were constructed between 1992 and 2002 and range from four to 12 floors.
Jay Koster, senior managing director of Staubach Capital Markets, represented AT&T in the deal. Sphere: Related Content
Wells REIT II has acquired a five-building, 1 million-square-foot office campus in the Buckhead submarket of Atlanta, through a long-term sale-leaseback with AT&T. The campus will headquarter AT&T Wireless' operations in the city. The transaction's terms were not disclosed.
The property is located in the Lenox Park office park (pictured) on Lenox Park Boulevard, between Peachtree Road and Interstate 85. AT&T Services Inc. and its subsidiaries will occupy all five of the buildings under new leases running from 10 to 15 years. The buildings were constructed between 1992 and 2002 and range from four to 12 floors.
Jay Koster, senior managing director of Staubach Capital Markets, represented AT&T in the deal. Sphere: Related Content
Friday, May 09, 2008
Indian Overseas Bank Seeking Sale Leaseback of Bank Portfolio
Business Standard - May 7, 2008
High property prices have opened up new avenues for state-run banks to shore up their precious tier-I capital.
Chennai-based Indian Overseas Bank is planning to sell its properties to self-promoted special purpose vehicle, thus realising the entire profit and then ploughing it back to its Tier-I capital. IOB will do a leaseback deal of properties that it had sold to the SPV.
According to the bank's estimates, the prices of its property has appreciated nearly 200 per cent over the last couple of years.
IOB has sought the approval of the finance ministry for implementing the idea, according to a top bank executive. If approved by the ministry, the government-owned bank's profit will soar by Rs 6 billion ($140 million) and the amount will be ploughed back to its Tier-I capital.
Banks are allowed to use 40 per cent of the rise in assets valuation to accrue to their Tier-II capital. In the current case, however, the bank will show the transaction as a sale and not revaluation. Hence the entire value of the property is accruable to its Tier-I capital.
The move followed a substantial depletion in the bank's capital adequacy ratio in the previous financial year as it had to comply with Basel-II norms. The capital adequacy ratio of the bank was 11.13 per cent as on March 31 compared with 13.27 per cent in the same period a year ago. The Tier-I capital stood at 7.31 per cent.
Since the government owns 61.23 per cent in the bank, it can dilute its stake to 51 per cent to raise equity capital. However, the bank is not considering a stake dilution at this point of time, the executive said.
Indian laws allow the state-owned banks to dilute up to 49 per cent governmental stake to retail and institutional investors. Sphere: Related Content
High property prices have opened up new avenues for state-run banks to shore up their precious tier-I capital.
Chennai-based Indian Overseas Bank is planning to sell its properties to self-promoted special purpose vehicle, thus realising the entire profit and then ploughing it back to its Tier-I capital. IOB will do a leaseback deal of properties that it had sold to the SPV.
According to the bank's estimates, the prices of its property has appreciated nearly 200 per cent over the last couple of years.
IOB has sought the approval of the finance ministry for implementing the idea, according to a top bank executive. If approved by the ministry, the government-owned bank's profit will soar by Rs 6 billion ($140 million) and the amount will be ploughed back to its Tier-I capital.
Banks are allowed to use 40 per cent of the rise in assets valuation to accrue to their Tier-II capital. In the current case, however, the bank will show the transaction as a sale and not revaluation. Hence the entire value of the property is accruable to its Tier-I capital.
The move followed a substantial depletion in the bank's capital adequacy ratio in the previous financial year as it had to comply with Basel-II norms. The capital adequacy ratio of the bank was 11.13 per cent as on March 31 compared with 13.27 per cent in the same period a year ago. The Tier-I capital stood at 7.31 per cent.
Since the government owns 61.23 per cent in the bank, it can dilute its stake to 51 per cent to raise equity capital. However, the bank is not considering a stake dilution at this point of time, the executive said.
Indian laws allow the state-owned banks to dilute up to 49 per cent governmental stake to retail and institutional investors. Sphere: Related Content
Wednesday, May 07, 2008
Orpea Ponders Sale Leaseback on Part of EUR 1.2 Billion French Care Home Portfolio
PropertyEU - May 5, 2008
French nursing home group Orpea said it plans to outsource part of its real estate portfolio in the second half of 2008. The company said it is considering different options, including the sale-and-leaseback of some of its development assets to one or more investors, and the direct sale of a number of properties. A third option would be to transfer part of the portfolio to a new OPCI property investment fund in which Orpea would retain a minimum of 60%.
The company added that it has already been approached by a number of French and foreign investors regarding the assets, but would not disclose the name of the interested parties.
Orpea, which made the announcement during the presentation of its results for the 2007 year, said that its property portfolio has a market value of EUR 1.2bn, of which development assets make up for EUR 350mln. The portfolio comprises of 103 buildings, of which 41 are partially owned, located in or near large towns in France.
'This real estate strategy aims to maintain robust margins while controlling the impact of rents on operating performance, in order to pursue the group's value creation policy,' the company said in a statement.
Orpea expects to open 13 new facilities totalling about 1,200 beds in 2008. The company is currently renovating or developing nearly 7,000 beds which are expected to increase its activities by 50% over the next three years. Sphere: Related Content
French nursing home group Orpea said it plans to outsource part of its real estate portfolio in the second half of 2008. The company said it is considering different options, including the sale-and-leaseback of some of its development assets to one or more investors, and the direct sale of a number of properties. A third option would be to transfer part of the portfolio to a new OPCI property investment fund in which Orpea would retain a minimum of 60%.
The company added that it has already been approached by a number of French and foreign investors regarding the assets, but would not disclose the name of the interested parties.
Orpea, which made the announcement during the presentation of its results for the 2007 year, said that its property portfolio has a market value of EUR 1.2bn, of which development assets make up for EUR 350mln. The portfolio comprises of 103 buildings, of which 41 are partially owned, located in or near large towns in France.
'This real estate strategy aims to maintain robust margins while controlling the impact of rents on operating performance, in order to pursue the group's value creation policy,' the company said in a statement.
Orpea expects to open 13 new facilities totalling about 1,200 beds in 2008. The company is currently renovating or developing nearly 7,000 beds which are expected to increase its activities by 50% over the next three years. Sphere: Related Content
Saturday, May 03, 2008
Citibank Completes $100 Million Sale Leaseback of 47 Bank Branches in New York City
Property Week - May 2, 2008
Dublin-based Markland holdings, jointly owned by Irish property entrepreneurs Sean Mulryan and Paddy Kelly, has made a $100m (£51m) New York purchase.
The investment and development group has bought 47 Citibank properties, which comprise bank branches and offices, across New York and the wider state that will be leased back to the bank. The price reflects a yield of around 6%.
Citibank will lease back the buildings for 15 years but has the right to occupy the properties for the next 30 years.
Markland Holdings is owned by Mulryan, founder of Ballymore, and Kelly, a fellow entrepreneur. It is run by managing director Aidan Scully. Mulryan first invested with Kelly in the late 1980s in Markland House Properties, before making his fortune with Ballymore in the 1990s.
Last year Ballymore International began equity raising through Irish stockbroker and investment bank Davy to raise more than €1bn (£785m) for overseas development and investments.
New York’s investment market is suffering from a seizure in debt markets and a stand-off between buyers and sellers that has resulted in a dramatic drop in sales – from $28.3bn (£14.3bn) during the first quarter of 2007 to just $5.1bn (£2.6bn) in 2008, according to Cushman and wakefield.
Markland could be trying to take advantage of this buyers’ market where UK and European investors can take advantage of the favourable exchange rate.
Savills Granite acted for Markland. Sphere: Related Content
Dublin-based Markland holdings, jointly owned by Irish property entrepreneurs Sean Mulryan and Paddy Kelly, has made a $100m (£51m) New York purchase.
The investment and development group has bought 47 Citibank properties, which comprise bank branches and offices, across New York and the wider state that will be leased back to the bank. The price reflects a yield of around 6%.
Citibank will lease back the buildings for 15 years but has the right to occupy the properties for the next 30 years.
Markland Holdings is owned by Mulryan, founder of Ballymore, and Kelly, a fellow entrepreneur. It is run by managing director Aidan Scully. Mulryan first invested with Kelly in the late 1980s in Markland House Properties, before making his fortune with Ballymore in the 1990s.
Last year Ballymore International began equity raising through Irish stockbroker and investment bank Davy to raise more than €1bn (£785m) for overseas development and investments.
New York’s investment market is suffering from a seizure in debt markets and a stand-off between buyers and sellers that has resulted in a dramatic drop in sales – from $28.3bn (£14.3bn) during the first quarter of 2007 to just $5.1bn (£2.6bn) in 2008, according to Cushman and wakefield.
Markland could be trying to take advantage of this buyers’ market where UK and European investors can take advantage of the favourable exchange rate.
Savills Granite acted for Markland. Sphere: Related Content
Saturday, April 26, 2008
Empire Completes $428 Million Sale Leaseback of 61 Sobeys Grocery Stores Across Canada
Empire Company Web Site - April 22, 2008
Empire Company Limited (TSX: EMP.A) today announced that it and certain of its wholly-owned subsidiaries, including Sobey Leased Properties Limited (“SLP”), have closed the sale of 61 retail properties to Crombie Real Estate Investment Trust (“Crombie”). The properties represent approximately 3.3 million square feet of gross leasable area and consist of 40 freestanding grocery stores carrying various Sobeys banners and 21 strip plazas all of which are also anchored by Sobeys bannered grocery stores. The sale was previously announced by Empire on February 25, 2008.
The selling price in respect of the 61 properties was $428.5 million representing an effective capitalization rate of 8.12 percent before transaction costs. Empire received net cash proceeds on closing of approximately $271 million. The difference between the $428.5 million sale price and the net cash proceeds received on closing is related to funds used for the retirement of debt and for additional equity investment in Crombie, in addition to closing and transaction costs.
Empire has realized a pre-tax gain of approximately $165 million on closing of this transaction. The net cash proceeds from the transaction will be utilized by both Empire and its wholly-owned subsidiary, Sobeys Inc., to repay bank indebtedness. Immediately following this transaction, Empire indirectly has a 47.8 percent ownership interest in Crombie.
Empire is a Canadian company headquartered in Stellarton, Nova Scotia with approximately $13.8 billion in annual revenue and $5.9 billion in assets. Empire’s key businesses include food retailing and related real estate. Sphere: Related Content
Empire Company Limited (TSX: EMP.A) today announced that it and certain of its wholly-owned subsidiaries, including Sobey Leased Properties Limited (“SLP”), have closed the sale of 61 retail properties to Crombie Real Estate Investment Trust (“Crombie”). The properties represent approximately 3.3 million square feet of gross leasable area and consist of 40 freestanding grocery stores carrying various Sobeys banners and 21 strip plazas all of which are also anchored by Sobeys bannered grocery stores. The sale was previously announced by Empire on February 25, 2008.
The selling price in respect of the 61 properties was $428.5 million representing an effective capitalization rate of 8.12 percent before transaction costs. Empire received net cash proceeds on closing of approximately $271 million. The difference between the $428.5 million sale price and the net cash proceeds received on closing is related to funds used for the retirement of debt and for additional equity investment in Crombie, in addition to closing and transaction costs.
Empire has realized a pre-tax gain of approximately $165 million on closing of this transaction. The net cash proceeds from the transaction will be utilized by both Empire and its wholly-owned subsidiary, Sobeys Inc., to repay bank indebtedness. Immediately following this transaction, Empire indirectly has a 47.8 percent ownership interest in Crombie.
Empire is a Canadian company headquartered in Stellarton, Nova Scotia with approximately $13.8 billion in annual revenue and $5.9 billion in assets. Empire’s key businesses include food retailing and related real estate. Sphere: Related Content
Wednesday, April 23, 2008
Cramo Group Closes Sale Leaseback of Nine Properties in Finland
Aberdeen Property Fund - April 21, 2008
Cramo has signed an agreement on the sale of its real estate properties in Finland
Cramo Plc has signed an agreement on the sale of nine of its real estate properties in Finland to Aberdeen Property Fund Finland K Ky and one or several companies owned by Aberdeen Property Fund Finland I Ky, and on the simultaneous leaseback of the properties with an initial fixed term of 10 years.
The properties include the headquarters of Cramo Plc located at Kalliosolantie 2, Vantaa. the transaction is expected to be closed in the end of April 2008. The resulting capital gain is estimated at roughly EUR 3.9 million, to be booked in other operating income of the Cramo Group during Q2 2008.
"The sale of the real estate properties in Finland follows Cramo's strategy on focusing on its core businesses. The transaction will release capital for the Group's growth strategy in equipment rental and modular space, while at the same time release Cramo's balance sheet from non-core assets. Sphere: Related Content
Cramo has signed an agreement on the sale of its real estate properties in Finland
Cramo Plc has signed an agreement on the sale of nine of its real estate properties in Finland to Aberdeen Property Fund Finland K Ky and one or several companies owned by Aberdeen Property Fund Finland I Ky, and on the simultaneous leaseback of the properties with an initial fixed term of 10 years.
The properties include the headquarters of Cramo Plc located at Kalliosolantie 2, Vantaa. the transaction is expected to be closed in the end of April 2008. The resulting capital gain is estimated at roughly EUR 3.9 million, to be booked in other operating income of the Cramo Group during Q2 2008.
"The sale of the real estate properties in Finland follows Cramo's strategy on focusing on its core businesses. The transaction will release capital for the Group's growth strategy in equipment rental and modular space, while at the same time release Cramo's balance sheet from non-core assets. Sphere: Related Content
Thursday, April 17, 2008
Tesco Enters $407 Million Sale Leaseback of Six UK Supermarkets
Property Week - April 15, 2008
Tesco, in its results for the year to 23 February 2008, revealed it had completed a £207m sale and leaseback deal with PruPIM at a 4.8% yield. (Tesco reportedly agreed to lease back the properties for 20 years with annual rent reviews linked to the Retail Prices Index and capped at 3.5 percent per annum.)
The deal is the third since Tesco revealed a new £5bn property plan last year which took the total earmarked for property sale and leasebacks and joint ventures to close to £9bn. It completed two transactions in 2007 which raised £1.2bn for the supermarket giant.
The first of these deals, with the British Airways Pension Fund, was a £445m deal completed at the end of the 2006/7 financial year. The second, a £650m deal with British Land, completed in March 2007.
Tesco said in a statement: ‘Whilst yields have increased modestly in recent months, appetite for Tesco's property and covenant remains strong, and if market conditions remain conducive, we expect to be able to complete further transactions on attractive terms in the months ahead. It added: ‘We are currently in discussion with potential counterparties.’
The proceeds from the property deals will be used to fund expansion and its share buy-back programme - which has so far re-purchased Tesco shares worth over £1.1bn.
The net book value of Tesco’s fixed assets is £19.8bn, up from around £17bn estimated last year. Most of this value is in its freehold store portfolio. It estimates the current market value to be £31bn, representing a 57% premium to book value. Sphere: Related Content
Tesco, in its results for the year to 23 February 2008, revealed it had completed a £207m sale and leaseback deal with PruPIM at a 4.8% yield. (Tesco reportedly agreed to lease back the properties for 20 years with annual rent reviews linked to the Retail Prices Index and capped at 3.5 percent per annum.)
The deal is the third since Tesco revealed a new £5bn property plan last year which took the total earmarked for property sale and leasebacks and joint ventures to close to £9bn. It completed two transactions in 2007 which raised £1.2bn for the supermarket giant.
The first of these deals, with the British Airways Pension Fund, was a £445m deal completed at the end of the 2006/7 financial year. The second, a £650m deal with British Land, completed in March 2007.
Tesco said in a statement: ‘Whilst yields have increased modestly in recent months, appetite for Tesco's property and covenant remains strong, and if market conditions remain conducive, we expect to be able to complete further transactions on attractive terms in the months ahead. It added: ‘We are currently in discussion with potential counterparties.’
The proceeds from the property deals will be used to fund expansion and its share buy-back programme - which has so far re-purchased Tesco shares worth over £1.1bn.
The net book value of Tesco’s fixed assets is £19.8bn, up from around £17bn estimated last year. Most of this value is in its freehold store portfolio. It estimates the current market value to be £31bn, representing a 57% premium to book value. Sphere: Related Content
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